Baroness Neuberger: My Lords, the Minister will be well aware that the latest survey by the British Association for the Study of Community Dentistry has shown huge disparities in the standards of oral health across the country. The highest instance of decay was seen in Merthyr Tydfil, where 76 per cent of five year-old children have decayed, missing or filled teeth. How does the Minister think that a dental contract that thus far seems to have involved some69 per cent fewer patients seeing an NHS dentist, including 11,000 children, will tackle that inequality?

Lord Hunt of Kings Heath: My Lords, a revised outline business case for the redevelopment of the Royal National Orthopaedic Hospital site has been submitted to the NHS London strategic health authority. The SHA is working with the hospital and my department to ensure that an affordable business case is put forward. The SHA hope to make an announcement in the next few months, once it has considered the business case.

Lord Laming: My Lords, I am grateful to the Minister for that reply. Will he confirm that this hospital, a national centre of excellence, is locatedin buildings that were built with a life expectancy of15 years during World War II? Will he confirm that during the past 10 years there have been a number of strategic reviews, the most recent of which described the hospital as the jewel in the crown of the NHS? Will the Minister do everything in his power to ensure that a decision is made in the very near future?

Lord Turnberg: My Lords, I am grateful to my noble friend for her response. I picked those schools because they are such an obvious and excellent example of the way in which it is possible to bring together Arab and Jewish children to encourage co-operation and co-ordination. As the Minister knows, the teachers are mixed Arab and Jew, andthe head teachers are Arab and Jew and share responsibilities for the schools. That is just a small example of the large number of efforts that are being made to improve relations between Arab and Jew, Palestinian and Israeli.
	Is my noble friend aware that the Israeli 100 shekel note, for example, has a picture of a village called Piki'in where Jews, Christians and Druze live in a close harmonious relationship? Does she agree that organisations such as One Voice, with its 250,000 young Palestinian and Israeli members, and hospitals such as Hadassah, where Arab and Jewish doctors and nurses work closely together, are the sorts of grassroots activities that we in the UK should be publicising and building on as we try to encourage the peace process?

Baroness Royall of Blaisdon: My Lords, I was not aware of the examples cited by the noble Baronessor of the support of the Japanese Government. However, it is clearly incredibly important that scientists are able to exchange views. Bringing them together from all the countries of the Middle East not only enables them to do better research and work together but also fosters understanding and is an important way forward. I will take this back to the Foreign and Commonwealth Office; the more that we can promote exchanges between scientists, as well as supporting their work in the region, the better.

Lord Harrison: My Lords, does my noble friend not recognise that it is wholly reprehensible that the six excellent universities in Northern Cyprus are unable to join the Bologna process, which seeksto strengthen the ties among universities in the European family, simply on the say-so of the Greek-Cypriot Republic of Cyprus—it, incidentally, only has one university—because it is considered that it speaks for the whole island of Cyprus. Will my noble friend redouble his efforts to understandthe difficult issues here and give some recognition to the Turkish Cypriots, who at least voted in favour of the Annan peace plan and have had little rewardfor it?

Lord Adonis: My Lords, they will not face declining membership; they are not part of the Bologna process at present. However, a number of activities are included in the Bologna process, which is about the structure of degrees and the transparency of higher education systems, and they are open to universities in the north of Cyprus. For example, a regular programme of seminars is organised, giving information about the Bologna process and encouraging the exchange of information between members. Those are open not only to countries and universities that are part of the Bologna process but more widely. As it happens, I am informed that no universities in the northern part of Cyprus have taken part in those. However, there are full and ample opportunities for universities in the northern part of Cyprus to engage.

Lord Adonis: My Lords, to coin a phrase, I think that it would set a dangerous precedent were I to range so wide of the Question, which is about the Bologna process. As I think the House is aware,the European Union remains committed to lifting the isolation of the Turkish Cypriots through financial and direct aid. However, it is clear that this isolation will only be fully lifted in the context of a comprehensive settlement to reunite the island, and Her Majesty's Government are fully committed to that outcome.

Baroness Sharp of Guildford: My Lords, canthe Minister give the House and the universities of the Turkish Republic of Northern Cyprus any idea of the likely timescale for the consideration of their applications?

Lord Patel of Blackburn: My Lords, does my noble friend agree that this is an academic and humanrights issue, and will Her Majesty's Government helpto install the fundamental human rights of 45,000 students so that these six universities would be allowed to take part in the Bologna process?

Lord Hannay of Chiswick: My Lords, would the Minister recognise that there are some who do not take as strong a view as my noble friend on the broader political issues but who still find the Minister's response a little disappointing? Does henot recognise that the north of Cyprus is within the territorial limits of the Council of Europe and the European Union, so it is surely wrong that academic institutions there do not get the benefits of the Bologna process? Is there no way of decoupling the status issue, on which the Government's position is clear—I sympathise with it—from the issue of the academic excellence of these institutions? Is there no way in which the meeting in May can not only reject a formal application but bring out some of the positive points being made about how these institutions can be part of the Bologna process?

Lord Adonis: My Lords, no one has made a greater contribution to seeking to resolve the Cyprus problem than the noble Lord, Lord Hannay. I defer to his great wisdom in these matters, and I will certainly draw his remarks to the attention of my honourable friendBill Rammell, the Minister for Further and Higher Education. However, I stress again that formal participation in the Bologna process, which is the issue at stake, needs to be separated from the making of those reforms that go with it and ensure much stronger university systems. The opportunities and aid available through seminars, supporting material and so on to universities that wish to engage in that process are fully available to universities in the northern part of Cyprus.

Lord Harrison: rose to call attention to the position in British society of those who profess no religion; and to move for Papers.
	My Lords, all my life, religion has all too frequently meant division and separation. At school, non-Anglicans were excluded from morning assemblies until prayers were said—an infelicitous image of separation lodged in the minds of young, impressionable boys. When my own children came of school age, my wife and I had to choose between sending them to the local church school or exporting them out of area and so separating them from their circle of friends in our closely knit local community. It scarcely rated as parental choice. When I came to this House, I once again found myself segregated as this Chamber—my workplace—is daily transmogrified into a church.We non-churchgoers troop in afterwards like guilty office workers returning from a quick inhalation of inspiration from the street outside. Perhaps those who wish to pray could copy our Muslim colleagues and use the private prayer room. Those are three examples of the regular experience of those of us who profess no religion and those non-churchgoers who are the silent majority.
	It is time to speak up, especially as a more strident note is now sounding. The Anglicanism of my youth, more sedative than stimulant, now gives way to the harsher tones of those like the most reverend Primate the Archbishop of York, who describes us as "illiberal atheists" and "aggressive secularists". We learn thatto combat this perceived intolerant public atheism,the most reverend Primate the Archbishop of Canterbury, the head of the Roman Catholic Church and the Jewish leader will meet this summer in a holy alliance to plot the counterstrategy—a less than ecumenical approach. Indeed, it seems to me that the religious today do not lack leaders but they lack leadership.
	Religious belief continues on its long-term decline in Britain, as the most reverend Primate the Archbishop of York recently acknowledged on the "Today" programme. However, his remonstration of us non-churchgoers as the authors of this steepening decline is neither warranted nor deserved. My debate today seeks to rebut those charges and to tabulate those areas of public life where we feel unacknowledged, unprized and under-represented. I hope, too, to ponder on what government and the wider community might do to reflect better this modern and more secular Britain that is developing, in particular in its public policies and institutions.
	In that, I call for fair play. I invite our religious colleagues to debate how we can find common ground to establish a new consensus. I offer my own credentials in this quest for consensus by reminding your Lordships of the debate that I led two years ago highlighting the urgent need for the church, the state and those of religious beliefs and none to unite, perhaps on a more equal basis, to save Britain's unparalleled architectural and cultural heritage revealed in the wealth of its parish churches and city cathedrals. I believe that the right reverend Prelatethe Bishop of Worcester, who is with us today, contributed to that.
	I have unswervingly and religiously voted for the Government over the past seven years but I confess to qualms about their so-called faith agenda, whichhas the merit of being well meaning but whose consequences have all too often been ill directed.The Government fulfilled a 2001 manifesto promiseto encourage co-operation between religious communities and themselves by publishing a paper entitled Working Together but their compass on promoting togetherness is too unsteady. They signally fail to canvass the views of non-churchgoers about religious matters despite the fact that, as the 2001 Home Office Citizenship Survey asserts, four out of five of us find that religious belief is not central to our self-identity.
	Working Together is lax in the way in which it elevates obscure religious groups such as the Jains and the Zoroastrians to a significance way beyond their numbers. It too eagerly equates religious belief with specific ethnic communities, thereby overlooking the authentic non-religious views and needs of, say, our Chinese and Caribbean communities. It is seduced by using religion as a key to revealing other problems and opportunities. It passes over the myriad other groups and subsets who make up the mosaic of Britain and deserve to have their substantial and unique voices heard. Most egregious, though, is the omission of those for whom religion is either perfunctory or defunct—we the silent majority. The report compounds its diagnostic errors by proposing therapies that are dubious. The use of public moneys and resources to seek out and harvest the views of small, unrepresentative religious groups is problematic.
	However, I am particularly perturbed by the Government's companion paper, entitled Building Civil Renewal, which apparently encourages civil servants to dilute the strength of the secular voice,
	"by preparing to mount publicity and media-handling strategies to answer adverse criticism from the secular quarter".
	That is neither wise nor even-handed. Groups suchas the National Secular Society and the British Humanist Association, of which I am a member, should be encouraged, not discouraged, from commenting on the development or the framing of relevant laws and policies. Had those groups been dispassionately asked and thoughtfully answered, some of the rough edges of legislation regarding religious hatred or religious schools might well have sat better with the very communities such laws are designed to serve.
	However, let me turn to other, sometimes unintended incivilities visited on us, the non-churchgoers, arising from the muddled miasma of thinking about the role of religion in Britain today. Why on state occasions such as Remembrance Day is no representative from the non-religious community invited to attend the Cenotaph? How appropriate is it that the commemoration of those killed in London in the bombings of 7 July takes place in an Anglican cathedral, when such buildings have lost their once universal numinosity? Indeed, one of those murdered was a prominent secularist. Would a Christian be content with a humanist funeral if that was all that was on offer?
	The various standing advisory panels set up by the Government to garner the views of religious groups forgo—indeed, avoid—the contribution that non-churchgoers might proffer. So too with the Foreign and Commonwealth Office's Religious Freedom Panel, bereft as it is of the humanist voice. Also, the chaplaincy services found in the armed services, in NHS hospitals and the Prison Service—important services offering comfort and advice—are provided exclusively by the church. Why should they not be extended beyond that? After all, our prisons are not overcrowded with regular churchgoers.
	I harbour anxieties that the Government are devolving community services to religiously motivated groups and that it will further erode the clear principle that public funds should be disbursed in a non-discriminatory manner. A further discomfort is the fact that humanist marriage ceremonies—which I have had the privilege to be invited to and to preside over—are not recognised as a legal marriage. Why not? My view, for what it is worth, is that the churches should open up their premises to the wider community, who value the local church as a fine building redolent of the local community. Indeed, why should they not preside over humanist marriages?
	My hair shirt itches on the question of public service broadcasting. "Thought for the Day" is a dusty desert in the oasis of political and current affairs reporting on the "Today" programme, but these days the even earlier "Prayer for the Day"strays beyond the bounds, as witness yesterday's unchallenged criticism of the Government's liberalising legislation on gambling. No one should be deaf to criticism, but I deplore the abuse of that unearned licence as the nation's reveille at 5.45 am.
	The Government must redouble their efforts to ring-fence moneys provided for education in schools and other institutions, but that becomes an increasingly difficult task—indeed, a Sisyphean task—when a school is deliberately encouraged to develop a Christian ethos. I still believe in the principle of schools being charged with the clear task of imparting knowledge, skills and the ability to reason and think. Religion should be confined to the Sunday school. At the very least, religious education should restrict itself to the disciplines of historyand the study of ideas. Neither school, hospital, prison nor public or community services should be metamorphosed into the vessels of promoting religion.
	The Queen has done an outstanding job as our head of state, but is it not an unfair burden to place on her—or on her successors—that she should combine being head of state with the role of titular head of the church, especially given that belief in God is a very personal decision and not one that should be assumed or, for that matter, particularly expressed? I join those in the Anglican communion who believe that the Church of England should be disestablished. The Government should canvass views widely about the desirability and practicality of that.
	I hope to hear the Minister's views not only on that but also on those other areas of public policy. I hope her response will be positive and that there might be a consensual meeting between those who represent the religions and our own people, so that we can strike a way forward that is both profitable and modern for a modernising Britain. I beg to move for Papers.

Baroness Carnegy of Lour: My Lords, thenoble Lord, Lord Harrison, is one of the more perspicacious Members of your Lordships' House. Of course I accept that the anxieties and resentments that he has expressed so vehemently are real; they may even be widespread. I suggest, however, that there is at least one very important reason why he, and others who are like-minded, should take comfort. In this country of many faiths and none, our common aim must surely be to bring out the best in everyone. That involves accepting that for many, although of course by no means all, their best derives from their religious faith.
	On the face of it, that proposition may seem dreamily naïve. Throughout history, and alas very much at this moment, religion has been and is at the root of terrible events and some of our most intractable problems. Religious fundamentalism, not least Christian fundamentalism, has a lot to answer for on the world stage. What many of us see as out-of-date theology holds back medical research, delays improvement in the well-being of the world's poorest and so on.
	It is therefore unsurprising that religion is often cast as a malign influence, as I think the noble Lord has cast it. It is cast as something to be stood up to by government, and government does indeed respond from time to time by picking a fight with religious bodies, even when, as occasionally happens, there is no real need to do so. Of course, sometimes the religious bodies get their way.
	In a democracy, however, government is not mainly about dealing with organisations, although they are important. Ultimately, government is about individuals and enabling people of diverse backgrounds and points of view to live together harmoniously; to understand, co-operate with and support one another; to help one another to prosper; and to be open to helping others beyond our shores.
	This is my point to the noble Lord: it so happens that the great faiths that we have in this country—Christianity, Judaism, Islam, Hinduism and Buddhism—are all, at heart, about just that. They are about empathy, feeling what it is like to be in another's shoes, being self-critical, seeking and recognising the good in others, giving people the benefit of the doubt, and helping others where help is needed. Of course, that behaviour is plentiful in people who profess no religion, but because it is the kind of behaviour that all the great faiths in our midst nurture at their heart, and because, goodness knows, we all need that kind of behaviour, no one should feel threatened by, or indeed threaten or resent, those who live by a faith.
	The noble Lord, Lord Winston, referred the other day to his lecture at Dundee University and expressed the view that we in this country have never needed spirituality more than we do today. He speaks as a scientist. However, spirituality—ones understanding of what life is about—is a deep-down thing. It is part and parcel of a person, and it is unsurprising that, when that spirituality is threatened, there is a strong reaction from organised religion on their members' behalf. The noble Lord, Lord Harrison, and those who share his concern worry too much. The tribal behaviour of religious bodies is one thing, especially when, rightly or wrongly, they are cornered into acting politically; the spirit within individual members of those faiths and the behaviour that comes from it is quite another. All of us, the Government of the day included, need to nurture spirituality wherever it grows. We need the best in everyone even if we do not necessarily accept from whence that best comes. Let us face it: we are all in this together.

The Archbishop of York: My Lords, the noble Lord, Lord Harrison, has described me as having a harsher voice, but I can assure noble Lords that they will not hear a harsher voice. Twenty-seven years ago I was chaplain to a young offenders remand centre, Latchmere House. Every inmate was asked to declare his religious affiliation, and four young men were registered as having no religion. One Sunday, all the inmates were offered the chance to go to worship. The four young men with no religion declined the offer, while their fellow inmates on the A wing took up the offer. The prison officer, not wanting the four men to remain locked up in their cells, asked them to clean the toilets on the wing. The following Sunday, our four non-religious young men took up the offer to go to worship. The prison officer was puzzled why they had opted in this week. "Why are you going to chapel?" he asked. The four replied, "Sir, we didn't like the 'No Religion' place of worship". Crudely as they put it, those four young men were saying in their naivety that we are all essentially religious. The question is not whether we worship, but rather one of who or what do we worship. We give allegiance to something, and during my time at Latchmere House we persuaded everyone to volunteer to clean the toilets.
	In a study called "Spirituality" among randomly selected primary school children in Nottingham and Birmingham some years ago, the researchers said that they did not come across a child who did not have an inherently spiritual perception of life. For me, religion is a narrative we all inhabit that makes sense to us of what would otherwise be nonsense. Time does not allow me to speak at length, but let us be clear: dogmatic assumptions also underline non-religious world views—Marxism, Darwinism, Freudianism, capitalism, secularism, humanism and so on. Those are clear dogmatic positions.
	For me, this is not a human-centred universe. Religious and non-religious people need to recognise the absolute mystery of existence. By mystery, I do not mean the unexplained, but the question that persists beyond the possible explanation. Wittgenstein put it wonderfully when he said:
	"Not how the world is, is the mystery, but that it is".
	Beyond all the explanations the question persists: why should there be anything at all rather than just nothing? For me, belief in God, whose face I have beheld in Jesus Christ, means not only that he makes me see things in a new light but that he sets me free to do things in a new way. Why? Because for me he is not only a model for life, like birds for the aeroplane, but a living presence who helps me to live as he lived. He is not just a great teacher who lived, or simply a person to be studied in a book, or a perfect pattern or example.
	"We can help make the world safe for diversity. For in the final analysis, our most basic common line is that we all inhabit this small planet. We breathe the same air; we all cherish our children's future. And we are all mortal".
	So said J.F. Kennedy in his commencement address at American University on 10 June 1963, and I agree with him.
	How are we to do this? I suggest we do it by not polarising the claims of law and freedom. For me, the greatest danger we face in this country is the ethical and spiritual problems associated with the concepts of law and freedom. It is a problem for society, which can scarcely hope to survive without the delicate balance between them. If we do not delicately balance them, we will be in trouble. It is a problem forthe individual, who swings uneasily between the seemingly old-fashioned moral imperative of a higher authority and the seemingly legitimate demands of their own physical and moral nature. As one of my predecessors, Archbishop Stuart Blanch, said:
	"Long before we perish of pollution or civilisation goes up in some nameless holocaust we may die the death of those who, in the pursuit of freedom, undermine the law, or in the name of the law extinguish freedom—unless, that is, we are prepared to learn from the past and take more seriously than we sometimes do the accumulated wisdom of a peculiar gifted people—the people of the Bible".
	For me, any society that forgets its memory becomes senile. Balancing the rule of law and freedom has been the greatest gift this nation has offered the world. I trust, therefore, that we will not give away that birthright for the very thin stew of social justice. The sure-footed way of keeping our birthright is the,
	"maintenance of true religion and virtue",
	as we say in the prayers. How? By maintainingthe intermingling of religion, morals and law. The severance of law from morality and of religion from law has,
	"gone much too far. Although religion, law and morals can be separated, they are nevertheless still very much dependent on one another. Without religion, there can be no morality, there can be no law".
	So said Lord Denning.

Lord Judd: My Lords, I am sure the whole House should be deeply grateful to my noble friend Lord Harrison for having introduced this debate. I have often felt, in the debates he introduces in this House, that he brings with him a warm engagement withthe realities of society, what people are really encountering out there and what really makes society, at the grassroots, tick. It is always good that he challenges us with those perceptions.
	I am sure I am not alone in reflecting that in the experience of life, some of the finest, most humane, perceptive and principled, most socially committed, wise and decent people I have encountered have been among those who are agnostic, atheist and those just with no religion. Conversely, it would be madness to deny that the reality of the human story is that in the name of religion so much suffering has been caused, so much oppression and bigotry generated.
	As one bred in a Church of Scotland and English non-conformist family, I have always been very much at home in the Anglican Church since my wife introduced me to it, and I sometimes ask myself: what is it that makes me feel at home there? I believe it is the inclusiveness, tolerance, rationality and openness of that church at its best. I cannot say how sad I become when there seem to be those in its ranks who want to turn it into just another exclusive sect. I would argue that exclusiveness and sectarianism are the biggest dangers to humanity in the age in which we live.
	Some years ago I was serving on the Commission on Global Governance. It was a fascinating experience; people were there from all around the world, with a great deal to offer. We got on extremely well on that commission. I remember reflecting, in a casual conversation one day with another member of the commission, that in some ways our natural intellectual village was a commission like that. We lived in an international world; that meant something to us. We found it an altogether good and positive experience to be together. Reflecting on this, my friend and I came to the conclusion that our position was very privileged, and at times it must be very threatening to many deprived and excluded people throughout the world.
	Dwelling on that thought, I have come to the conclusion that we must be careful not to deny identity. It is terribly important to develop a sense of identity. People need to be secure in what is familiar and means something to them. The challenge is then to lead on from that position to a recognition that the world can only survive, let alone prosper, if we co-operate and learn from each other and intermingle in the fullest sense.
	If that is true of those with faith, it must be true of those with no religion. We deprive ourselves of an essential part of the success of society unless those who have that particular orientation—or lack of orientation—are as full members of society as anyone else. We should be concentrating on the importance of contributing from our different backgrounds to a citizenship that we all share; a global citizenship.
	I conclude with this experience. Forgive me if it is a little personal. I was once discussing my younger daughter with my parish priest, who is a good friend. She is an extremely warm and committed person who, I am proud to say, works in the front line among women with mental health problems in deprived communities. I was discussing the fact that she did not share a sense of religion. He said to me, "Frank, I have come to the conclusion that what we should be doing in life is seeking truth. We all find a path to start climbing the mountain of truth. We cannot hang around at the bottom looking for the perfect path; we start climbing from where we are. It is a very big mountain and takes a long time to get to the top, but as we climb, is it is important to remember that countless other people are climbing it on other paths. If by climbing whatever path we have chosen we reach the summit together, we must respect and love those who have chosen paths different from ours".

Baroness Flather: My Lords, I, too, would like to thank the noble Lord, Lord Harrison, for initiating this debate. This House excels at this kind of debate. Perhaps no other political Chamber is brave enough to discuss these issues so openly. For that, we should be grateful not only to the noble Lord, Lord Harrison, but to everyone who will take part. They will say things that matter to them, and that is the bottom line.
	I was brought up a Hindu by a very devout mother. At the age of 12, she started me off on meditation. Unfortunately, the holy lady who was living with us who I meditated with used to fall asleep very quickly and start snoring. A child of 12 is too young anyway, and when the person who is supposed to be leading you into something very special starts snoring, that is not a very good start.
	The other problem that arose was that my mother was a very unhappy woman. In spite of her great religious belief—her following all the rituals and festivals and so forth—she was full of anger. She had great grievance against everyone, including all of us; her three children and her husband. None of us had lived up to her expectations in any way whatever. Surely, being a religious person should give you peace of mind. What else would you want to be religious for except to feel good inside you? She did not feel good inside and that is what started me on the path that I have now taken.
	As we have heard, all religions are essentially good, we all know that. It is the followers who are a problem. They are the best and worst and we have seen that time and again. The followers lead us into the best and the worst.
	Hindus respect all faiths; there is no question about that. When I was a child we were told that it was just a question of pathways to God, as the noble Lord, Lord Judd, said, and that you could choose whichever pathway you wanted. There is nothing lower or higher; it is a pathway to God. That is how I was brought up.
	When I came to this country, I knew that it was Christian. I have never had any problem with the value system. My value system as a Hindu is no different from the Christian value system. We all want the same things; we all try to do the same things. It has always been thus for me.
	Hinduism is a very broad church, if I may use that term. I am an atheist and yet I am accepted by Hindus because as far as I can I follow the principles of the Gita, which I consider the most important Hindu book. In my small way I try to live by that. I do not believe in God but I believe that we have to live a good life on this Earth. We have to give out as much as we can. That is no different from any other faith community. We are all taught similar things.
	Looking at the Blair decade, where are we at? What different has happened? I am deeply concerned about the pandering to other faith communities in this nation. This is a Christian country. We should either accept that or separate the state and Christianity;you cannot have it both ways. The other faith communities should not be led to believe that they have equal faith rights in this country. That leads me essentially to the faith schools. If our children arenot educated together, when will they learn to live together as adults? Our children need to live and learn together—that is absolutely straight down the line—but they do not.
	The other problem is the intent to dilute very important factors such as our wonderful anti-discrimination legislation. In trying to pander to the faith communities our Prime Minister is willing to sacrifice parts of it, which is a very dangerous thing to do. He has led us into the most disastrous faith-based conflict we could ever have imagined. I do not know how we shall get out of it. It has destabilised the Middle East and put us under threat. What will come out of it? We need to consider these faith issues very carefully. I have not faced religious discrimination but that may be because I have faced other sorts of discrimination and have not realised that I faced religious discrimination. I have run out of time; I hope that noble Lords will forgive that.

The Lord Bishop of Worcester: My Lords, for the noble Lord, Lord Harrison, to initiate this debate requires him to adhere to the convention of the House by which he moves for Papers. I understand that that device is a technicality and that he will withdraw the Motion at the end of the debate, but it has set me musing upon this question: suppose the noble Lord, Lord Harrison, were to press his Motion for Papers? What would the papers be about? Who would write them? What sort of papers would they be? Therefore, he has raised a really important question by initiating this debate and I, for one, am grateful for that. We need some papers.
	Some of the papers might, for instance, be truces—that is, areas in which we agree that, although we differ from one another, we want to ensure are not going to turn into a battleground. Some of the papers will be academic papers, which examine the diverse philosophical traditions from which we operate and the contribution that both faith and non-faith has made to the development of those intellectual traditions. But those would not be all the papers.
	Some of the papers would have to be vision statements about the shape of the public square in this country. What kind of life together do we envisage? How dull and flat is that public square to be in the interests of offending nobody or, on the other hand, how variegated, colourful and rich in design is it going to be to enable us to rejoice at bits of it, even though we dislike other bits? That seems the kind of vision statement that might be another of the papers.
	There will—and we had better be realistic—also be some papers that amount almost to a summons to battle on certain issues. I note that the noble Lord, Lord Joffe, is going to speak later, and I look back with very mixed feelings at the phalanx of Bishops with which he was faced when he presented his Bill to this House. That was a mark of a situation in which we have not come to a common mind, and where a sense of mutual threat arises between faith and non-faith on the particular issue with which the noble Lord was concerned. So some papers will make uncomfortable reading.
	What will be the purpose of this set of papers for which the noble Lord has moved in his Motion? What would we be trying to achieve? We would be trying to achieve the production of a book of papers, as it were, or perhaps a loose-leaf folder, in which the particular issues of grievance that arise from time to time on the religious and non-religious sides can be held together in a binder that allows us to pursue these issues in due course and at the right time—an educational enterprise or kind of seminar for us all to be involved in.
	Some of the arguments that will take place around individual papers may be quite fierce, but some of them will be areas of agreement. As I was musing early in the debate, I noticed that the noble Lord, Lord Steel, was in his place and recalled the very creative work that he did in relation to the Scottish Parliament in developing ways in which the recollection and prayerful traditions of a variety of the citizenry could be articulated. Although I may well not reflect the views of all the Lords spiritual, I for one would welcome the creative production of a paper to go in that ring binder.
	I am not quite sure what I am saying. It may be that I would prefer the noble Lord, Lord Harrison, not to withdraw his Motion at the end of his debate. What I am really asking for is a programme in which we develop together a common vision of a societyin which we face the fact that there are serious disagreements but on the other hand rejoice in the points of common life that we can create together and perhaps draw the sting out of a discussion that could otherwise easily turn into who is more marginalised than whom—a discussion that I would find regrettably unconstructive compared with the vision of the papers and the ring binder that the noble Lord, Lord Harrison, has put into my mind.

Lord Macdonald of Tradeston: My Lords, I, too, congratulate my noble friend Lord Harrison on initiating this timely debate. I declare an interest as chairman of the All-Party Humanist Group. Perhaps another relevant interest is that during 30 years working in television I was responsible for the production of religious programmes during periods at Granada and Scottish Television. As a non-believer I worked amicably with the religious advisers and produced a pretty wide range of programmes that were usually well received by viewers of all faiths and none. I hope to build on that experience of constructive collaboration and perhaps persuade colleagues who are religious to support my appeal today for television scheduling that is broadenedto encompass ethical and philosophical as well as religious matters; scheduling that allows time for the systematic exploration of other belief systems such as humanism.
	More specifically, this appeal is directed at the BBC, at its executive board and at the public appointees on the new BBC trust. The appeal to the BBC to update its approach to religious broadcasting is well-founded on recent legislation, parliamentary debates, Select Committee reports and ministerial statements, all of which informed the new BBC charter and the BBC's agreement with Government. I am pleased to say that the All-Party Humanist Group, now with a growing membership of around 100 MPs and Peers, played a constructive role at all stages of the debates on broadcasting.
	Our humanist focus in Parliament was how bestto broaden the appeal of religious and ethical broadcasting, how to make it more representativeand attractive, thus helping broadcasters in their mission of,
	"sustaining citizenship and civil society".
	The humanist group helped to ensure that the Communications Act 2003 gave the BBC a duty to make programmes about "religion and other beliefs". Indeed, the Minister in your Lordships' House responsible for broadcasting in 2003, my noble friend Lord McIntosh of Haringey, specifically stated that these "other beliefs" included non-religious beliefs. During the parliamentary business of the BBC charter renewal, my noble friend Lord Davies of Oldham confirmed, quite assertively as I recall, that parity of esteem should be granted to other beliefs. Some guidance on the nature of the new approach came from the report of the Select Committee on BBC charter renewal, ably led by the noble Lord, Lord Fowler, which recommended that,
	"the BBC should review its programme output to ensure that it complies with the Communications Act 2003 by providing services of a suitable quality and range dealing with religion and other beliefs".
	The Select Committee also called for the "objective portrayal" and "wide definition" of,
	"different religions and other belief systems".
	Further, the Select Committee was,
	"eager to see more high quality, innovative and thought-provoking programmes emerging from the BBC Religion and Ethics Department".
	With its new charter and structures in place, the BBC will now, I trust, respond to the needs of a changing society. When I first produced programmes 40 years ago, religious programmes were overwhelmingly Christian programmes. Today, BBC output must take account of the beliefs of several million UK citizens who are Jews, Muslims, Buddhists or Hindus. It surely is now time for this outreach in pursuit of broader understanding and tolerance to embrace the many millions more British citizens who are not religious believers but who aspire nevertheless to lead good lives. Those non-religious people can construct principled ethical frameworks from ancient, universal wisdom, from Confucianism or Stoicism, or from the Enlightenment philosophy of David Hume or John Stuart Mill, or indeed from the writings of philosophers today such as Anthony Grayling.
	I accept that the recent increase in public interest in humanism is in part a reaction to the increasedand sometimes threatening activism of religious fundamentalists. Naturally, we humanists are fearful of irrational fervour that rejects tolerance and refuses dialogue. However, we must not allow those very real concerns to dictate or distort the positive role that we might play in broadcasting, letting ourselves be defined as simply anti-religious. Humanists will resist being defined negatively and then no doubt having our demands for fair treatment fobbed off by reference to occasional atheistic essays by a Richard Dawkins or a Jonathan Miller, however worthwhile and thought-provoking those might be. The appeal on behalf of 100 or more parliamentarians and for countless freethinking viewers is much wider, as illustrated by this debate.
	I encourage the new chairman of the BBC trust, Sir Michael Lyons, and the BBC director-general, Mark Thompson, to open a public dialogue on how best the BBC can update its approach to religious and ethical broadcasting to meet its new remit. I assure noble Lords that humanists would participate constructively to produce the kind of religious and ethical programming that would help the BBC in its vital requirement to sustain citizenship and civil society.

Baroness Byford: My Lords, I have to thank the noble Lord, Lord Harrison, but I admit to him that I have never spent so long in preparing for a five-minute speech and then feeling that what I had put together was not what I was trying to achieve. He has, indeed, challenged us and I have to admit that at one stage I thought that I would not be able to take part in this debate.
	I accept the views that the noble Lord has expressed and I accept that he has shown us in his contribution that a lot of his views are based on his family experience—and I suspect that most of us who are speaking will find that as well. He mentioned how his children had to go to the local Church of England school because it was nearer, although it did not really suit him. I would slightly challenge him on that; if that had been me, I do not think I would have done that if I really did not believe that there was goodness to be gained from that school. If it represented something against which I believed, I am certain that my children would not have gone to that school.
	The noble Lord also challenged us on praying in this Chamber. I cannot always get in, but I feel that it very much a part of the start of preparation. He said that we could do it elsewhere; but debates take part in this Chamber and that is why it is so important that those who have faith and who wish to participate are able to do so.
	My journey is probably similar to many others—family, school, church and everything else. At one stage, when I was confirmed, I wanted to become a missionary. I thought that that definitely was my calling in life. Unfortunately, my later teens took me down a different road and I went through a period during which I certainly did not support the Church in the normal, regular way. But it has become an important part of my life and I wish to share that briefly.
	I was delighted to be invited to become a canon of Leicester Cathedral, which is at the centre of a multi-cultural, multi-faith city—and we welcome people to the cathedral. But my normal routine practice has been with a small parish church, and I have the great joy to be one of the servers, because, to me, the most personal and private part of our faith is when communion is taken. For me, that is a bonus.
	I have to say to the noble Lord, Lord Harrison, if he has concerns about church schools, why do so many people—many of whom perhaps are not active in the Church—seek to send their children to those schools? The noble Lord needs to answer that question in some way. What is it about those schools and why do people choose them? My husband is a governor of Barleycroft, a primary school in the middle of Leicester. There are 17 mother tongues in that school and I cannot imagine the number of faiths that it copes with, but it tries to share. The importance of the debate today is to get a better understanding and acceptance for the good of the whole.
	I turn now briefly to something that I have come across over many recent years. I have a great friend who has struggled with alcoholism. It is a huge problem, particularly at a time when people are at their lowest, for whatever reason—there is no self-belief, they see no way out of it. Alcoholics Anonymous has produced a little blue book. It is simple—and chapter 4 talks about agnostics. Clearly, some of those people have no belief. Through this book, the organisation tries to say to people, "We believe in a power greater than ourselves". We could debate that, but that is not religion or faith in the purest sense, and it gives a person, as the noble Lord, Lord Judd, has said, a chance to start somewhere. It is remarkable how that book and that approach to helping people to start to climb a mountain—to believe in themselves and in helping others—help them manage to overcome their problem. I am delighted to say that my friend will say that every hour, every minute, every day is another challenge to her; but if it were not for that book—and she at that stage did not have that faith—she would not have managed to come out of it.
	Lastly, I share with your Lordships the whole question of religion for those who cannot find faith. It is not for everyone and I respect the views of the noble Lord, Lord Harrison, and other speakers. Many noble Lords know that, sadly, our son committed suicide in 1999. For him, faith was something that he could not grasp. I am sure that he would never have committed suicide if he could. It was not that help was not there, but, for him, it just was not possible. All I would say to those who will follow me is that we do need to have some faith, some hope for people, because, without that, other people like my son—who could not find it; it was not that he was not used to it, but he could not find it—will not lead fuller lives as they might otherwise do.
	So while we must work together, which is immensely important, I still think that there is a real role for faith in this world today and, I hope, for many years to come.

Baroness Greengross: My Lords, perhaps I may start by thanking the noble Lord, Lord Harrison, for initiating this debate and to say how deeply I was moved by listening to the noble Baroness, Lady Byford, just now.
	I want to talk about something that is a little different—the vision of the new Commission for Equality and Human Rights, of which I am privileged to be a member. The vision of the new commission is of a Britain at ease with its diversity, in which all its people are treated with respect and fairly, and where they can be certain that they will be treated equally under the law—as embodied in the Human Rights Act, the Equality Act and the employment equality regulations. The Human Rights Act outlaws discrimination between people on the grounds of religion or belief. Two words are used in those Acts—"religion" and "belief", which are obviously considered to be different or one word would suffice.
	Non-religious beliefs are defined as spiritual or philosophical convictions which have an identifiable formal content—humanism being an obvious example. Unfortunately, the Human Rights Act has been slow to be fully enforced and to make its full impact in all the areas where humanists and other non-religious people need it to. Non-religious beliefs are of a single type in their legal aspect along with religious beliefs. They are legally equivalent to religious beliefs, but we have seen again and again that the implications of that are not being felt.
	When the parliamentary Joint Committee on Human Rights advised that, to be compliant withthe legal requirement not to discriminate between religious and non-religious beliefs, Parliament should explicitly include "belief" along with "religion" in the current Charities Bill, the Government paid no heed to its recommendations. To comply fully with the law, non-religious beliefs must be recognised across all relevant public policy in their own right as having equal validity to religious ones. The implications of this must be fully realised in services, employment, marriage and so on—and in all areas where religion is currently an issue.
	Part of the problem has been that until now there has been no real enforcer of equality and human rights law. I hope that that will soon change as a result of the CEHR and I hope that a fair approach to religion and belief will begin to be promoted as a result of its creation. I have been inspired in my life by people who live their faith—and they are of many faiths—and by people who do not have a faith and who believe that we should have total responsibility for our own moral codes. I hope that fairness and equal treatment under the law will be what we can all expect.

Baroness Rendell of Babergh: My Lords, I, too, congratulate my noble friend Lord Harrison on an original idea for this debate and on a fine opening speech. I begin by quoting the final lines of a poem;
	"for the world which seems
	To lie before us like a land of dreams, So various, so beautiful, so new,Hath really neither joy, nor love, nor light, Nor certitude, nor peace, nor help for pain; And we are here as on a darkling plainSwept with confused alarms of struggle and flight, Where ignorant armies clash by night".
	Thus Matthew Arnold on Dover beach watched the receding tide of Christian faith, at a time when science was starting to assert its claims and people began to turn away from Christianity. Many of them, like me, began as Anglicans but lost their faith in youth or middle age.
	The trappings of the religion we have lost remain dear to us. Let us take church music. Where would we be without Bach or Handel? What about the writings of the saints? I wonder how many times, with increasing enjoyment, I have read the Life of St Teresa of Avila and The Confessions of St Augustine. When I go to Florence, one of my greatest pleasures is to visit the Carmine to look at Masaccio's "The Expulsion of Adam and Eve from the Garden of Eden", an event in which I emphatically do not believe. In the words of Thomas Hardy, an atheist but a "churchy" man, who loved ritual and church music:
	"It is only a sentiment to me now".
	Darwin wrote:
	"I cannot persuade myself that a beneficent and omnipotent God would have designedly created the Ichneumonidae with the express intention of their feeding within the living bodies of caterpillars".
	Most of us would agree that it is this conflict between beneficence and omnipotence which makes belief impossible. There is no answer to it. We are obliged to own that something which was beautiful and once seemed an incontrovertible truth was acceptable only when magic was a reality and science a mystery.
	One of the great pleasures of my life was to attend morning service and to hear the most beautiful prose ever written in the English language. Its demise,to be succeeded by the New English Bible and the Alternative Service Book, put an end to that. Slowly, as the prayer book and King James Bible faded from use, so their language passed from the vernacular. It is rapidly becoming as though that language had never been.
	When I was young, Bible and prayer book language permeated the speech of every Christian. However ignorant they might have been in other aspects, they were all in possession of this particular lingua franca. They understood when someone spoke of the Good Samaritan or the lilies of the field.Such obsolete words as "manger" had their own significance, as did "falling on stony ground". Society was bound together by this language. In rural communities, someone who failed to understand it would have been regarded as strange and, oddly, among those who in other ways were barely literate, uneducated. Now, to the middle-aged, it is barely recognisable and entirely mysterious to the young.
	Not long ago, a friend told me that he wondered what the world we lived in would be like if religious faith had not dictated the form that works of art must take. What would painters and sculptors have taken for their subjects in the absence of the Holy Family and the saints? There is, of course, no answer. We cannot even guess what we might have had instead of "The Last Supper" or the many depositions and resurrections. But if we had had more "Mona Lisas", more assembled families and "The Marriage in Florence" instead of "The Marriage at Cana", would that have made so much difference? As it is, painters put their friends and relatives into their pictures, thinly disguised as Mary Magdalene and St Peter, but these paintings brought people together and gave them a common bond as they came into the church—perhaps the only beautiful and gorgeous place they ever knew.
	It seems to be true that, if God did not exist, we would have to invent him and that many who would call themselves atheists turn to other objects of veneration or are drawn to witchcraft, black magic, astrology and various types of divination. In Greece, I understand, a group of people have returned to the worship of the Olympian gods and sacrifice to Zeus and Aphrodite. Was society morally better when:
	"The Sea of FaithWas once ... at the full"?
	If I am speaking mainly of Christianity in western Europe, it would seem not. The 20th century has been called the bloodiest and most savage humanityhas ever known, but those preceding it were, in proportion, as violent and brutal. Arnold's ignorant armies clashed by night then as now. Atrocities and massacres occurred when almost everyone believed in obeying the commandment "Thou shalt not kill".
	Are we better now? Not noticeably, although we may be more aware. Most of us know that we should not abuse children, commit perjury or steal, but we go on committing crimes that we no longer call sins. Lately, a child in London has been murdered nearly every week. There are still 7 million slaves in the world. God could not make us good but nor does his absence. It is strange that so many people declaim, when misfortune comes, "What have I done to deserve this?".
	The countries of Scandinavia, intensely Lutheran while Ibsen was writing, later became almost entirely secular. They are widely acclaimed as societies nearer to the ideal than any others and are held up as an example to the rest of us. Post hoc is not proper hoc, but the fact remains that, when Scandinavians were at their most devout in the 19th century, their peasantry was desperately poor and emigrating in droves.
	It appears that society is much the same when atheist as it was when godly. It has lost a certain kind of cohesion—the comradeship of Bible language and church assemblies—but not the music, literature and art of Christianity, and there is no sign that it will.

Lord Carey of Clifton: My Lords, I join others in thanking the noble Lord, Lord Harrison, for introducing this debate on a very unusual topic, although I am sorry that he attacked the most reverend Primate the Archbishop of York in the way that he did. I do not think that anyone should be attacked for holding strong views, and the Archbishop is greatly admired and respected for his. However, I agree with the noble Lord in finding common ground between us, and I hope that my contribution will help towards that end.
	For me, the issue is largely about the kind of society that we all aim to create and how responsible listening and arguments might strengthen the building up of community. The debate hangs on the word "religion", and thereby also hangs a problem. We simply cannot lump religions together in that way as though they mean the same thing; they do not. What is common to most religions is an acceptance of a creator who brought all things into existence and that this creator gives meaning, hope and life to everyone.
	If those two opinions separate the believer from the unbeliever, we should not then assume that religion is necessarily the place of superstition, credulity and ignorance. Both the unbeliever and the believer are essentially handling the same data—the same raw material, of which Professor Brian Hebblethwaite posed the question: how do we best account for the data all around us? That is, how do we best account for the existence of a universe endowed with powers and laws when apparently none of this has to be? How do we account for the capacity of the fundamental stuff of the universe to evolve not only life and consciousness but also mind, intelligence and personality? I find that some atheists seem to be unaware that their beliefs, too, are at best a faith. Indeed, it seemed to me to be a lot to swallow that from absolute chaos, confusion, chance and futility have emerged intelligence, moral awareness, beauty and purpose.
	I make those points to underline the fact thatmany intelligent believers are anxious to relate their beliefs to truths of different kinds. We are notall obscurantists or flat-Earthers. From these observations flow my concern that, in building a good, strong, free and secure society in which truth and beauty exist, we need to co-operate more—I think that that is the purpose of the noble Lord's Motion—and to find ways to overcome barriers to our working together. It is certainly untrue that the voice of the humanist is silenced in our land; indeed, these days it is often harder for the Christian believer to be heard.
	The challenge breaks two ways. It is certainly true that those who profess a religion must realise their responsibility to contribute to the health of society. They must not impose barriers on freedom to think differently or compel their adherents to believe in set ways. That there is bad religion around cannot be doubted. We have only to consider what Sunni and Shi'ite believers are doing to each other in Iraq at the moment to see what evil can be done in the name of Allah Most Compassionate. The same could be said of Christianity in the past. But there is another side of religion: the vast majority of believers of all faiths are honourable, decent people who live by their creeds and want to make a better world.
	By the same token, those who profess no faith or belief have a responsibility to put their own personal beliefs to work. If the profession of no faith simply leads people to assume that life is meaningless and ultimately purposeless, then its contribution to lifeis worthless and not worthy of debate in your Lordships' House. But if the professing of no religion leads, as it often does, to humanism, it can make a great contribution to our world, and that should be encouraged. However, if I may be a little provocative, in my opinion, atheists are not renowned throughout the world for their commitment to the very poor, the starving and the needy. Whereas, as I have already indicated, believers have made and are making an effective contribution throughout the world, it will not do for others to rubbish that and then do little to make up for what they feel are its inadequacies. Those who have nothing but contempt for religion should heed the comments in the Guardian of 12 September 2005 by the noble Lord, Lord Hattersley. He is not known for his great belief in religion as such, but he says in the article that unbelievers are less likely to care for the poor or spend time with outcasts of society. He writes:
	"'Good works', John Wesley insisted, 'are no guarantee of a place in heaven. But they are most likely to be performed by people who believe that heaven exists'".
	It is not my intention to score points. Our world has enough divisions without deepening controversy and taking attention off its serious problems. I believe that the Motion charges us all to move beyond using our freedom to disagree, to building a world where all believers and unbelievers may use their beliefs as building blocks to create a better society.

Baroness Murphy: My Lords, I add my thanks to the noble Lord, Lord Harrison, for raising this debate. I speak as a rationalist, agnostic—I shall not say atheist in the light of the comments of the noble and right reverend Lord, Lord Carey. It is not a particularly comfortable matter, but one reason to contribute to this debate is to stand up and be counted.
	I was going to remain rather calm throughout this, but I was rather offended by the comments of the noble and right reverend Lord, Lord Carey, about the role that people without faith have played in doing good in the world. He is entirely and wholly wrong. We feel just as passionately as those who have faith about ensuring that society is just.
	I want to spend my few minutes expressing concerns about the growing influence of religionon the delivery of public services. I am very uncomfortable with the 2003 Government policy of encouraging faith-based organisations to participate in public service provision. Of course, I acknowledge that there are occasions when religious organisations or their representatives can reach the unreachable by statutory sector workers. I can cite a good example. In the Hassidic Jewish community in north Hackney in the early 1990s we had very low rates of child immunisation in the health service because of a myth that had grown up among the women in the community about its religious significance. Local GPs and health visitors tried hard to persuade, but it was the mobilisation of the community rabbis who finally nailed this myth and persuaded the women that immunisation was a good thing for their community and positively to their children's advantage. I was deeply honoured to work with them and am grateful for their intervention.
	The crucial issue for me is whether religious service organisations compete on an even playing field for public service contracts, are explicitly committed to delivering services to people of all faiths and none without prejudice, disapproval or prosyletisation, and whether they have employment practices consistent with public service values. I have three examples. The first is an organisation on which I served, and with which I was proud to be associated. For many yearsI sat on the board of Springboard Housing Association, established by a Christian minister with explicit Christian values. It continues to deliver housing services to scores of people with mental health problems, learning disabilities and to older people. It is true that in the early days we started our board meetings with a prayer, which took me as much by surprise as Prayers when I first started in this House. But the ethos was established early thatit would deliver services without prejudice or prosyletisation. On its website there is no religion, but there is an exemplary statement of values and employment practice. It is a great organisation and I hope that it will continue to deliver public services.
	During the 1980s and 1990s when I was a community psychiatrist in inner London, I saw homeless mentally ill people, particularly those with alcohol and drug dependence problems, sleeping on the streets rather than go into a shelter where they would be subjected not only to disapproval but rules drawn up to satisfy religious edicts. I am told that the Salvation Army is less rigid than it was, but its website did not give me comfort that those people would be as welcome as they should be.
	An example that is more worrying is CrossReach, which was formerly known as the Church of Scotland Board of Social Responsibility. It employs more than 2,000 staff in 80 services stretching from Shetland to the Borders, providing care and support services for thousands of people. Indeed, it has an excellent reputation for the quality of care that it provides. I say that first of all. It has an annual expenditure of more than £45 million, of which more than 99 per cent comes directly from local government. It is overtly proselytising, its website is as embarrassing as Radio 4's "Prayer for the Day" and it makes quite clear that it reserves jobs in the organisation for those who share its particular brand of faith. The Scots are even less religious as a nation than the English or Welsh. I wonder what it feels like to have your social care delivered by this overtly missionary organisation.
	How can the Government encourage local government to contract with religious organisations for public services? What guidance do they provide on mission statements and the policies that they follow before handing out public money for back-door ways of pushing beliefs that most people now find unbelievable?

Baroness Massey of Darwen: My Lords, I am very pleased that my noble friend Lord Harrison has secured this debate. It gives us the opportunity to explore some important issues to which I hope we shall return, including the view that spirituality, mystery, values, a full life and concern for others are not the property of the religious alone.
	EM Forster said in 1938 in a marvellous essay called, "What I Believe" that to,
	"get a little order into the contemporary chaos",
	one had to believe in personal relationships. I agree with him. He went on to say that the,
	"individual is important, and that all types are needed to make a civilization".
	Indeed, all types are entitled to respect, equal status and an equal profile. This does not always happen to those who profess no faith, as others have said.
	Fundamentalist views in religion are largely responsible, of course. Wars, torture and discrimination are some by-products of religion as well as human venality. I want to consider attitudes towards sexuality and women in religion. Historical dogmatism still influences us, as do some rather bizarre attitudes. I have just read a book called Eunuchs for the Kingdom of Heaven which tells of Origen, successor to Clement of Alexandria. Seeking Christian perfection, he castrated himself and declared that quite a few women indulged unceasingly in lust. Clement himself had earlier said that
	"if the reason taught by the stoics did not even allow the wise man to move his finger any which way, how much more must the seekers of wisdom affirm their domination over the organ of generation?".
	Augustine, too, recommended control over sexuality, noting that some people can move their ears either one at a time or both together. Therefore, controlling the sexual organ with will should be possible. It is little wonder that there is confusion, embarrassment and guilt about sexuality.
	Perhaps these examples are extreme, but it is true that attitudes to sexuality and repression of sensible, healthy debate has been adversely affected by historical, religious attitudes. Extremism may appear ridiculous, but it is alive and well, and it is dangerous. It adversely affects those who do not adhere to its tenets. For example, recently an applicant for a postat a right-wing Christian college in Middlesbroughwas grilled in the interview about his views on the Catholic Church, birth control and whether he believed in Noah's Ark. This man happens to be a Methodist lay preacher.
	I was in the United States recently where it was reported that extreme members of a Baptist Church in Topeka had picketed burials around the country of American troops killed in combat in Iraq, claiming that their deaths were God's punishment for a nation harbouring homosexuals.
	What is going on here? In his book The God Delusion, Richard Dawkins suggests that religion may be a by-product of something else. Large numbers of people,
	"flatly contradict demonstrable scientific facts, as well as rival religions followed by others".
	They do indeed, and they often hide their prejudices behind professed religious faith. This prejudice shows itself in relation to sexuality, women, gay people, science and a host of other things.
	People sometimes ask me, "Can you not accept that religion has inspired wonderful art, music, poetry and architecture?", as referred to by my noble friend Lady Rendell. Well, not quite. Some great religious art, in its broadest sense, was initially condemned by religion, even defaced or destroyed. In any case, I argue that those artists were displaying a creative instinct rather than a religious one. I have immense respect for many courageous and humane people who profess a faith in your Lordships' House. While I do not support the retention of the Bishops' Benches, I have admired brave stances by the noble and right reverend Lord, Lord Harries of Pentregarth, the former Bishop of Oxford, when he decried Section 28; and by the late Lord Sheppard, the former Bishop of Liverpool and a great cricketer, for devoting his lifeto the under-privileged. Such people and others like them would not deny rights to anyone, and would support diversity. I respect them as people, not as representatives of their faith.
	I still distrust religion in its fundamental form, and am proud to be a humanist. I do not feel threatened. We are a growing number, and a more vocal group. We have a valid and important contribution to make to society. We should be consulted, locally and nationally, on issues which affect society. I hope that politicians will take note. Does the Minister agree?

Lord Wedderburn of Charlton: My Lords, I speak as a humanist. I agree with the position of the noble Lord, Lord Goodhart, and am grateful to the noble Lord, Lord Harrison, for introducing this debate.I do wish to convert anyone, but I understand how difficult it is for right reverend Prelates even to understand the sort of position that humanists adopt; the noble and right reverend Lord, Lord Carey, who is sadly not in his place, was one.
	This issue raises a question of human rights, because the European Convention on Human Rights, adopted in the Human Rights Act 1998, proclaimed in Articles 89 and 14 the freedom of religious belief and freedom, as interpreted by the Strasbourg court, of other beliefs—including, as it puts it, atheism or scepticism—to be human rights. Practical matters arise from that. The Government are bound by the standards which the Human Rights Act has adopted into our law. I will advert as quickly as I can to areas where the Government should take note and, perhaps, begin an inquiry or, as has been suggested, some dialogue with humanists, who suffer a number of disadvantages in a religious environment.
	First, on broadcasting, everybody knows that you can hear "Thought for the Day" at a quarter to eight. The British Humanist Association asked whether some humanists without a belief in God could be selected for these talks, which are currently usually given by people who think that morality and a sense of behavioural conduct can be introduced only by those who believe in God. The BBC replied in correspondence, saying that it could not include such speakers. Why?
	Secondly, on charities, a religious organisation automatically passes the first test imposed by the Charities Act 2006. Organisations for other purposes and beliefs do not. That is straightforward discrimination. On health, as noble Lords have mentioned, the National Health Service recruits chaplains; so do prisons. All of them are either Christian or some other faith. As I found, being in hospital a lot last year, no humanist chaplains appear to exist.
	When Swedish doctors found that women were threatened by a plague of chlamydia, they organised distribution of condoms in the streets and backed explicit television programmes explaining their use. Could that happen here? I very much doubt it. I ask the right reverend Prelates who have spoken whether they will support a move to liberalise broadcasting in that respect from public service bodies, which are bound to a balance of religion and other beliefs. Then there is the Government's structure of consultation, based on the paper Working Together in 2003. In fact, the standing advisory panels and other groups that control the consultative process include no humanists and no persons other than those who belong, with great respect, to religious organisations.
	On education, we all know that a church school can be either the only primary school in a district,or certainly the best. I congratulate the Church of England on maintaining the quality of church schools, but when you see humanist parents going to church on a Sunday for perhaps the first time ever, certainly only for a short period, you know why:they wish to get some advantage for their child in school selection. I have personal experience of agreat number of people doing this; it really does discriminate in society. More importantly, Church of England schools, for which a report was produced for Archbishops in 2001, still aim to proselytise and convert. It is a problem in our society that schools based on religious faith must have a divisive effect. The new academies include an increasing number of aggressively religious schools teaching creationism. One such school states that its object is to instruct pupils that,
	"those who love Jesus the Lord will enjoy his presence forever. But those who do not will face God's judgment".
	That is hardly an inclusive philosophy to put to children who enter.
	Lastly, the justification for some of these things is, as the noble Lord, Lord Adonis, said in a recent debate, based upon the census of 2001. It stated that 72 per cent of the population ticked a box saying "Christian" in a long list of religions ending with "None". That result has clearly been exploded by the Office for National Statistics. Other surveys have shown that the number of humanists in societywith no religious belief is much higher than the Government state. I must end there, but I suggest that there are practical matters for ordinary people here which demand some inquiry or consultation from the Government with the British Humanist Association.

Baroness Whitaker: My Lords, the idea that ethics can be unattached to a religious belief has ancient roots. It is a significant strand in our heritage which we have downgraded in comparison with faith-based morality, but which can offer help in many of our modem dilemmas. I remind the House of my interest as a vice-president of the British Humanist Association.
	I will not rehearse the many Asian, Greek and Roman thinkers, from the Indians of 700 BCE to Seneca in the first years of the Christian era who upheld this idea, but they are most interestingly analysed in Karen Armstrong's latest book, The Great Transformation: The World in the Time of Buddha, Socrates, Confucius and Jeremiah. She emphasises their focus on conduct. It is in this spiritual development of thinking about conduct that humanism belongs and has its origins.
	Humanism offers a coherent ethical structure which goes something like this. Life is finite andwe must therefore make choices. We must take responsibility for these choices ourselves. Human thinking and human nature are so constituted that we want to justify our choices. We want them to be worth taking responsibility for and to be consistent, hence a system of ethics. The great schema of conduct like the Code of Hammurabi, the doctrines of Confucius and the Buddha and the precepts of the Old Testament prophets are great early ethical frameworks.
	Skipping a few centuries, the Enlightenment added a new chapter to the humanistic strand, growingas it did out of the evidence-based discoveries of the scientific renaissance, but, perhaps following the excesses of the French revolution, humanism later became publicly much less respectable. Although nobody tried to imprison Thomas Hardy, George Eliot or Joseph Conrad, the MP Charles Bradlaugh was sentenced to six months for refusing to take the parliamentary oath and had to speak from a barge just outside territorial waters to avoid arrest. I hope we know better now.
	After all, humanists were at the forefront of some of our more recent progress. They were active in the founding of the United Nations and its agencies, that great leap forward in human rights, as those who knew Lord Ritchie Calder could testify. They were not against religion, simply apart from it. In the 1970s, long before the setting up of the Inter Faith Network, humanists took a lead in founding bodies like the Standing Conference on Inter-Faith Dialogue in Education and the Social Morality Council, together with people of faith.
	Humanism can include many cultural bases. Jawaharlal Nehru said to George Bernard Shaw:
	"We are both atheists but the difference between us is that I am a Hindu atheist and you are a Christian atheist.".
	Perhaps I may put myself in the box of Jewish atheist, very attached to one of the precepts of the prophet Micah:
	"to do justly, and to love mercy, and to walk humbly".
	But other faiths would claim these values too andwhy not? I am delighted that the Berlin declaration published on 25 March by the German presidency reflects the broad sweep of Europe's heritage and values and does not confine itself to the narrow Christian strain. I am also glad that this was supported by many religious groups and all those who think that church and state should stick to their separate roles.
	But I also want more space in this country for the non-religious universe. Faith is not the only basis for morality and I want to inhabit that culture, notin opposition to religion but in opposition to its monopoly. I do not think that makes me an aggressive secularist; but it does alienate me from aggressive proselytising. The website of the Department for Communities and Local Government says:
	"The traditions of all major faiths contain teachings commending the fundamental values of equality and respect which are so important to community cohesion.".
	It is not only the major faiths that commend these fundamental values—it is, at least as much, that great strand of non-religious belief that has carried them forward. I think my noble friend's department has government responsibility for non-religious belief as much as for religion and I hope she will listen with her usual perspicacity and push for more recognition for the non-religious approach. We are grateful for the grant of £25,000; but I think we would all benefit if local, regional and national bodies convened by the DCLG on matters of religion and belief and community cohesion had humanist representatives, who could more accurately reflect the beliefs and values of that large minority who do not profess a religion.

Lord Joffe: My Lords, I too am grateful to the noble Lord, Lord Harrison, for introducing this debate. I come to this debate with some hesitation because, although I am an atheist, I have always respected the Church of England for the courageous conduct of some of its clergy in South Africa during the apartheid regime, for its social and community work in the UK and for its stand on many human rights issues, and, of course, my admiration and respect for the most reverend Primate the Archbishop of York is unbounded.
	Sadly, however, when I introduced the Assisted Dying for the Terminally Ill Bill in this House, the attitude and conduct of the faith groups and some of their members made me wonder whether their views and actions on some social issues deserve the respect that government and parts of society give them. The purpose of the Assisted Dying for the Terminally Ill Bill was to prevent the unnecessary suffering of terminally ill patients. I imagined that, although there would be strong opposition from faith groups, they would show concern about the suffering and that, in their opposition, they would rely on well researched evidence, thoughtfully and calmly. I also assumed that they, as a small minority, would show respect for the 80 per cent of the public who supported the Bill. I thought that the church's attitude would be similar to the way in which the right reverend Prelate the Bishop of Worcester spoke earlier in this debate: calm, thoughtful and constructive. However, I was quite wrong. Compassion and respect for the views of the majority on suffering did not figure in that debate on the part of the opponents.
	The church campaign began with Archbishop Peter Smith, the Catholic Archbishop of Cardiff, announcing that it was the launch of the biggest political campaign by the church in its modern history. I was flattered that a small Bill that I had introduced should require such a campaign, given that modern history encompasses a number of wars, famine, poverty and a number of other very important issues. The campaign went on in an aggressive, emotional way. It was often misleading, it often relied on anecdote rather than careful research, and it was frequently plain scaremongering.
	Time does not permit me to go into the detailsbut typical was an article in The Catholic Times on2 April 2006, by a Father Francis Marsden, headed, "Legalising Euthanasia Turns Carers into Killers". The reverend father thoughtfully attached to that article a photograph of 24 children who were murdered by the Nazis. Self-evidently, that had nothing to do with the Bill; it was, in my view, a disgrace and obscene.
	The faith groups' campaign was a great victory, as the Bill was defeated at Second Reading by the breach of a long-standing tradition never to oppose a Private Member's Bill at Second Reading and by the ignoring of the key recommendation of the Select Committee which the House had set up to consider the Bill.
	The outcome was that a Bill supported by 80 per cent of the public was defeated by a campaign orchestrated by the churches. I do not suggest for a moment that the churches should not strongly express their views on issues in which they believe, nor that they should not campaign on those issues, but one would expect that a campaign run by the churches would be a model of fairness that all other campaigners could follow.
	The ultimate rejection of the Bill raised two questions. The first is: who do the church leaders represent on this issue? Research showed that 80 per cent of Catholics and 80 per cent of Protestants would have been in favour of the Bill. The second questions is whether it is right that church leaders should mount a campaign that was not even supported by their own laity, with the intention of imposing their beliefs on the majority of the population who do not share those beliefs.

Lord Graham of Edmonton: My Lords, I was interested in the remarks of the most reverend Primate the Archbishop of York about Latchmere House. For a period of my parliamentary life, I represented the Prison Officers' Association so I know the place well. The illustration he used about those who were of no religion being given an alternative task reminds me of when I joined the Royal Marines in 1943. Very early on, I was asked for my religion. I became an OD—a member of the other denominations—because that meant I was excused church services. That served me well during that period.
	This kind of debate is valuable for many people—believers and non-believers—because it is being held in a calm atmosphere with the utmost tolerance and respect shown for other views. People have been allowed to say exactly what they want—nothing extreme or too condemnatory. I listened to every speech and, whatever the point of view of the speaker, I was able to agree and disagree with something the speaker said. It has been therapeutic. I am a member of the British Humanist Association, and I heard discrimination against those who support my views that I had not appreciated. That is not to say that they are not correct because, of course, I accept the integrity of the speakers.
	I have always enjoyed carol singing, religious services and "Songs of Praise". On Sunday, I went to an 800 year-old church in Welwyn, Hertfordshire, for the baptism of a lovely little boy called Leo. I was there two years ago for the baptism of his elder brother, Toby. I enjoyed the service enormously. The church was packed full. The priest and the people in charge were very kind.
	I speak as a socialist and someone who believes in the brotherhood of man and in tolerance and fair play. There is no religion in the world, including Christianity, that should not hang its head in shame at the acts of its followers at some time or other. However, we are living in a period when we ought to respect each other.
	The noble Baroness, Lady Byford, whom I respect very much, said that everyone must have faith. I envy people who have faith because for them it is powerful, personal and precious. I have never been able to embrace that. My faith is in the human spirit and the ability of ordinary people to control their affairs. I do not besmirch or belittle people who think differently. Society needs an examination of the ways in which we can work more closely together. I congratulate my noble friend Lord Harrison on bringing this matter to the attention of this House. Those of us here today know from the media that there is some disquiet about people like me who do not believe in religion but who are religious about respecting the views of others. The Minister would do this House and the country a power of good if she were able to say that by some means or other the exclusion or non-inclusion of those who share my views would be looked at with respect. This debate has done a great service.
	I would like to have said a lot more, but I cannot at this time. The noble and right reverend Lord, Lord Carey, the former Archbishop of Canterbury, who has my respect, spoke powerfully. He used the word "contempt". As far as I am concerned, that has no place in a debate of this kind. If the Minister can help us by saying something about her intentions about a consultation that will be all embracing and will cover people with no religious views, as well as those who have them in the conduct of affairs in this society, we will be very well served.

Lord Roberts of Llandudno: My Lords, I cannot wind up this debate on behalf of these Benches but as an independent-minded person. If there were a party Whip on today, we would all be very embarrassed. We appreciate the opportunity to discuss this. Usually, I am one of three Methodist ministers in this House facing 26 Bishops; we feel totally overwhelmed. However, today, I seem to be facing serried ranks of members of the British Humanist Association. Hearing what they had to say makes us think. I have the highest regard for the noble Lord, Lord Harrison. I can call him a fellow traveller because he is on the same train as me every Monday morning. I am sure it would even be right to call him a friend. He has often spoken in this House of the need to preserve various church buildings and put them to wider use. That is right, but it is already happening. I come from a small Methodist circuit in north Wales. I know of one church that has a nursery class three times a week and a most unreligious bingo on Thursday night, so it meets the community. I know of another small church that has a music appreciation society, a mothers' union, an art class and all sorts of other things to meet the needs of the local community. Another church has a Welsh language class and meets the needs of the community in other ways. Churches have opened their doors and meet many needs.
	In 1993, there were floods in Llandudno that made 4,000 people homeless. The doors of the churches were open and they met a very real need. On 3 May, thousands of church halls will be used as polling stations for Welsh Assembly and Scottish Parliament elections. The church is in the community in many different ways, not only as a building, but to meetthe needs of people. I sometimes stroll up toSt Martin-in-the-Fields in Trafalgar Square. I have such regard for what happens there. The crypt has been open to the homeless since the time of the other Sheppard, who said that he wanted St Martin's to be the place where the love of Jesus could be found. It meets the needs of the community in that way.
	The Friends' Ambulance Unit has given tremendous help and is still there. The Religious Society of Friends meets the needs of the people. For some reason, the Salvation Army and the Church of Scotland have been criticised today. We are told that 2,000 people are employed by the Church of Scotland in social welfare work. Who would be doing that job if the Church of Scotland was not? Who would be meeting the needs of people if the Salvation Army was not? We can always say that it is not doing it properly and accuse it in different ways, but it is meeting the need in the best way that it can.
	I have a link with the needs of AIDS orphans at the Watoto children's village in Kampala in Africa. If non-believers want to help there that is wonderful, but the idea was sparked off by people with a faith vision. Without that faith vision, tens of thousands of children would not have survived today. If noble Lords criticise, they should please try to give us another alternative.
	People of all faiths and of no faith play an essential part in society, and their compassion, whatever their belief, is always appreciated. When there is need you do not ask, "Are you this or that denomination? Do you believe in this or that way?". We ask, "What is your need?". Perhaps it is not what we do, but our beliefs themselves—our faith—that is the threat.
	The other morning I went to the Imperial War Museum. I wanted to see the Holocaust exhibition. I also saw it in Yad Vashem in Israel. You can see that for nearly 2,000 years the Jewish people were homeless and persecuted. The pogroms were devastating and culminated in what Hitler did in the Holocaust when 6 million Jewish people were exterminated. Yet they went back to their country. What kept them in that hope? It was their faith—their religious tradition. That is why they survived.
	Therefore, we must say that faith, even though all might not share it, keeps society and people going. In the UK, are we not increasingly living more at ease with one another? It is wonderful to speak to people from different faiths and traditions. This sounds awful but, speaking of secular people, some of my best friends do not believe, but such people are some of the finest people—as has already been said this afternoon—that I know.
	Let us admit it—this has already been mentioned—some terrible things have happened in the name of every religion. As people try to exercise power, they express their greed. Sometimes people use religion as a label, when something is more tribal than faith. There is no depth of faith. Trouble begins with this superficial religion. At the heart of every religion is compassion, caring and tolerance. That is the root. If you have that, you can be pretty sure that these atrocities would not have taken place—I mention the Lord's Resistance Army in Uganda and the Christian Phalange, which attacked the refugee camps in Lebanon. These groups are deplored as much by believers as they are by non-believers.
	To have faith is a tremendous bonus in life.Dr Leslie Weatherhead, who has sadly left us, was one of the great ministers of his time. He said that when reason ends you need a leap of faith. I suggest, even to the humanists here, that when reason ends—when you cannot logically discuss your position—is there not a leap of faith that you also have to take, in whatever direction that might be? All of us need this invisible means of support to hold us in the more difficult times. If you can survive in the more difficult times without that faith, I envy you. Others find it very difficult to do so.
	Finally, recent votes in your Lordships' House refused to discriminate against folk because of their sexual orientation. I know from many noble Lords, on all sides of the House, that this caused uncertainty and heart-searching. But we refused any form of discrimination. I agree with that. People are people. They have depths, wits and different attributes. We must accept them as they are. Every one of us needs to stand up not only for our own principles, but to respect those principles that spur on other people. We might disagree with views and beliefs, but we will defend to the very end other people's right to hold them.

Baroness Wilcox: My Lords, I thank the noble Lord, Lord Harrison, for initiating this debate. I declare an interest. I am a communicant member of the Church of England. I am on the electoral roll of St Mawes Church, in Cornwall, and of St Peter's Eaton Square, in London, and an oblate of the Community of St Mary the Virgin in Wantage. I had great sympathy with my noble friend Lady Flather when she spoke about early meditation in her faith. At the school I went to, St Mary's Wantage, we learnt to meditate from the age of seven. It was from that early age that I planned how I would lead our hockey team to greatness.
	As a member of a Christian community that continues in so many parts of the world to suffer discrimination and persecution for its faith, I cannot help but be saddened if the noble Lord, Lord Harrison, and others feel lessened or harmed by the role of Christianity in our society. It is no part of my belief or of the church's to deny him his freedom of conscience or his ability to live by that conscience. Sadly, it sometimes, and increasingly, seems to some of us, as was so powerfully stated by the cardinal archbishop lately, that those of us with faith feel pushed to the outskirts of society and find our space, values and beliefs that are the very core of our daily being infringed and belittled.
	No one would disagree with the belief of the noble Lord, Lord Harrison, that in a democratic state a person's lack of religion should not lead to any kind of prejudice or deprivation. We agree that religious groups should be controlled in any misuse of their position. But religion—in our case, the Christian religion—has had a major effect on the history and sociology of many societies.
	Religion has played a great part in the evolution of education, so much so that in Britain, when the state moved to compulsory education, it decided to enter into a partnership with the Christian churches—a partnership which still exists. Even in this so-called secular age, when only a minority attend churches, faith schools still face very heavy demand for places. The modern state has tried to meet the position of those who profess no religion by allowing them to withdraw their children from religious assemblies. It is open to non-religious people to raise money and to set up schools of their own. Of course it might mean that their children have to travel long distances. That is very often so for religious parents who wish their children to attend a school of their choice.
	Here I admit to having had a conversation with the noble Lord, Lord Harrison, before the debate began to ask him quite what he had in mind. He told me the story of his little girl wanting to go to school with her friends, yet the local school was the Church of England state school. The noble Lord had to try to find another school that was not a Church of England state school. I was most touched by the love of a daddy who, in the end, gave in to his little girl wanting to be at school with her friends. I find most heartening this wonderful picture of the noble Lord's little girl with all her little Christian friends at school. I hope that she will come home and have lovely words to say to him, and that he will think more kindlyof us.
	Those who profess no religion have not yet evolved a common ritual and philosophy that appeals to the mass of the population. Perhaps that is why they have not yet set up any schools. Where are the humanist schools? I wonder how many people would attend them. Maybe now that this little group has been set up in the Houses of Parliament, it may work towards that end.
	The trouble is that humanism can seem too intellectual or remote. There is also disagreement about the prevailing non-religious philosophy, stretching from Nietzsche's superman to a vague humanism. By contrast, although religious adherence seems small, surveys show that around 70 per cent of people profess a belief in God. Many people's morality is still tied to the traditional religious patterns.
	We should strive, as my noble friend Lady Carnegy described so graciously, to live and let live, not to destroy the structures that have served us so well; to listen to each other, as we have here today. I believe that that will enable us to continue to live and evolve together—60 million of us in these tiny, tolerant Christian islands, with more trying to join us in their thousands day after day.
	For me, faith is not constructive or oppressive;it is liberating and empowering. I believe that the structures of religion are valuable to society today, even if the spiritual content is not embraced by all. Such is the long history of the interaction of society and religion in Britain that many landmark events in life are still marked by a religious ceremony. The rituals of birth, marriage and death still attract many people who do not practise their religion. We all agree that society needs values, self-respect, discipline and respect for others. In what faith is that not the fundament?
	I ask the noble Lord, Lord Harrison, to reflect how far our whole polity, our whole sense of what we are as a nation, our traditions of tolerance and many of the principles of care for the weak, the excluded and the outsider and of love of our neighbours are derived from the unique nature of the Church of England. Should we need any reminder of that as we reflect, as we did so recently, on the achievement of a great Christian Conservative, William Wilberforce, in the abolition of the slave trade? It is in the spirit of that unique and tolerant Anglican tradition that dissent, as here today, is accommodated as a challenge, not crushed in the dust, a challenge that means that we all have freedom to speak here, in which freedom the noble Lord spoke with such resonance.
	To those of us with faith, there seems no shortage of space in modern society for those who scorn faith. Let us not build vain citadels to separate believers and non-believers. The Word I believe in is the Word of love. Surely, in the great mystery of life, that spirit can include, enrich and ennoble us all.
	The noble Lord, Lord Harrison, spoke passionately about his disappointment in his Government and today challenged the Minister to disestablish the Church of England. We on these Benches will listen most carefully to the Minister's reply.

Baroness Andrews: My Lords, I welcome this opportunity to join the debate and congratulate my noble friend Lord Harrison on the opportunity that he has created for a debate which has been unusually personal, typically profound but also provocative. It has been a very welcome opportunity and I think that the response from around the House will have pleased him and those noble Lords who embrace a humanist and secularist point of view. It has been an unusual debate and it has been extremely rich and generous.
	My noble friend made a robust speech. I take some comfort from the fact that in the first conversation that I had with him about the debate he said, "You're going to have an extremely hard job summing up this debate". He was absolutely right. I did not know that he was going to challenge me to disestablish the Church of England at the same time. That is something that I shall take back to the department. It is also quite difficult to present a government view on some of the issues raised, not least by my noble friend Lady Massey. I must say that we have no position on some of what she said.
	It is also extremely challenging, in a debate that has ranged from Wittgenstein to our current philosopher, Roy Hattersley, to address some of the issues. I do not think that I shall rise to the occasion. As for the hazards of meditation, I can say only that in the silence of a Quaker meeting, I find myself firmly fixed on the object in hand with no thought of how to advance my career.
	This is a timely debate for many reasons, as the noble Baroness, Lady Carnegy, said, because the issues of faith and the rule of law have recently been very much in the public mind. In a society that is multi-faith, multi-ethnic and multi-cultural, this tiny, tolerant island of which the noble Baroness, Lady Wilcox, spoke, it is quite right that we should not avoid or deny the need to have such a debate. The church and faith groups do not want to avoid having such a debate. The Archbishop of Canterbury, in a recent lecture on secularism and faith, spoke about the shared recognition of law, which provides for a basic trust that all voices are being heard in the process of brokering harmony. We have heard all those different voices today, which have ranged from the Lords Spiritual to the voices of secularism and humanism. We have heard about the search for harmony.
	The Government must aim to let all voices be heard with equal respect, not least through the strengthening of the law to promote greater respect and social cohesion in all ways in our communities. Sometimes that debate takes place in a highly charged atmosphere. It is our task to ensure that those different perceptions and views can be held without risk. On the one hand, we have heard that some consider that our society is becoming more explicitly, even aggressively, religious. On the other hand, we have heard the view expressed with equal conviction and eloquence that Britain is becoming more secular, more materialist and more intolerant.
	My noble friend Lady Massey and the noble Lord, Lord Roberts of Llandudno, alleged that religion is sometimes seen to cause and be at the root of conflict. I say right away that it is not belief that impacts so negatively on us or society more broadly, it is the actions and manifestations by small numbers of people who distort religious texts or hold fanatical views. It is essential that we make, understand and express those differences. It is here that the work of my department becomes crucial in building a common language, understanding and shared values between those different perceptions. I shall return a little later to what we are doing but, for the moment, let me just give an assurance to all noble Lords who spoke from the secular and humanist perspective. We fully acknowledge that the humanist tradition in this country has a long and honourable history and a positive contemporary role. I hope that the noble Lords who spoke from that perspective will rise to the challenge laid down by the noble and right reverend Lord, Lord Carey of Clifton, of how to promote that more positive role.
	The noble Baroness, Lady Whitaker, describedthe premise and evolution of humanism as an ethical choice. The impact of humanists has clearly contributed to the sum of human good and happiness in innumerable ways. Humanism has a proud history of almost three centuries. This debate is as much about our nature—possibly expressed, as it was by the noble Baroness, Lady Flather, as things that matter to us, or as the search, the instinct for spirituality or understanding mystery—as it is about the nature of our society, our roots, our culture and our futures.
	The tension between belief and non-belief is profoundly historic and has shaped so much of the way we are today. From Dover Beach to Richard Dawkins, the ebb and flow of the contest about faith and religion is part of our evolving culture. We should reflect that, after Dover Beach, which was published at the height of materialism in the Victorian age in 1851, came the anti-science movement of the 1880s and the search for spiritualism. So these fashions and understandings come and go and those tensions are at the heart not just of Christian traditions but of faith traditions generally.
	My reason for exploring what lies behind and even beyond the debate, therefore, is to ask: what is the Government's role in this? We must be clear, as noble Lords have been, that we must celebrate and respect the basic freedom to believe or not believe. Is it proper for government to be involved in what for all of us is primarily a private matter? For many centuries now, we have held that faith is a private choice. In large part, the Government have no role in changing or challenging that. However, the private realms described by the right reverend Prelate the Bishop of Worcester, and the public squares, as others, not least the Archbishop of Canterbury, have pointed out, cannot be a neutral zone in matters of faith and morality because private faith sometimes haspublic implications, and the Government have a responsibility to ensure that the minority of people who do not identify with a faith are not, and do not feel, excluded from the mainstream political debateor uncertain about their rights. The Government certainly have a responsibility to ensure that people who do not identify with a faith do not have fewer choices or are less able to live out their lives in the way in which they would choose, to contribute to the life of the nation, or to take opportunities wherever they arise.
	The Government cannot always dictate the tone of the debate. Indeed, I listened with interest to what the noble Lord, Lord Joffe, said about this when he discussed his Bill. They can, however, moderate that tone. They cannot, and should not, seek to dictate the concerns expressed in and outside that debate. We have heard a lot about the notion of space today. We must make space for people, ideas and values from all traditions to contribute to that debate in a way that enables people to reflect a diversity of views, backgrounds and traditions. What does not help to achieve neutral space or mutual tolerance is when the debate over faith and non-faith is conducted stridently or in an atmosphere in which it is only too easy to be misrepresented as an oppressed or misunderstood minority.
	It is sometimes argued—the noble and right reverend Lord, Lord Carey, and the right reverend Prelate the Bishop of Worcester began to address this—that because it is difficult to argue with belief, we should not attempt to do so. That is wrong because strong faiths invite and welcome and are strengthened by argument. Argument is the way in which to expose misunderstandings and intolerance. This is an important debate because it also allows us to recognise shared values across a range of traditions—values that are shared by all faiths and by none: community, personal integrity, a sense of right and wrong, learning, wisdom, the love of truth, care, compassion, justice, peace, and respect for one another, for the earth and its creatures. Indeed, itwas a shared act of reflection that inspired the Millennium Declaration. All that has become part of our political DNA. The most reverend Primate the Archbishop of York talked about the mischief that comes from polarisation. We can see the reconciliation of freedom and law in the evolution of our laws in this country, from the Magna Carta to our recent laws on belief and freedom. It is a tradition of which we should be proud.
	In celebrating those traditions, we also celebrate the significant impact that the Christian tradition of this country has had on the way in which those traditions and freedoms have been shaped. Every faith has its own articulate and distinctive tradition of charity, community and social responsibility. The fact that the churches and the faiths have been on the front line in no way denies what the noble Baroness, Lady Murphy, said about the moral and ethical motivation of non-faith groups in the voluntary sector. She was quite right to say so. The noble Lord, Lord Roberts of Llandudno talked about the social gospel in relation to the floods in Llandudno. We could all cite traditions from our own backgrounds. The Society of Friends, for example, has traditionally worked for peace over many years and is a very proud holder of that banner.
	The bedrock of our freedoms is a framework of law—a range of statutory and legislative provisions that protect those who profess a particular religion as well as those who do not. Many noble Lords, suchas the noble Lords, Lord Goodhart and Lord Wedderburn, spoke about that framework when they talked about the Human Rights Act, which is the vehicle for the rights from the European Convention on Human Rights to take their place in our laws. Article 9 of the European Convention on Human Rights makes it quite clear that everyone has theright to think what they will and believe what they choose. I was grateful to the noble Baroness, Lady Greengross, for her exposition of that, and to the noble Lord, Lord Wedderburn, who challenged some of the aspects of that.
	It is important to remember that Article 9 protects both non-religious and religious beliefs. It makes it clear that the right to express and to manifest one's thoughts or beliefs is to be limited only when it is necessary to do so by law in the interests of public safety, for the protection of public order, health or morals, or for the protection of the rights and freedoms of others. The standard can be hard to achieve, but it is in that search and that tension that we find the things that enable us to recognise equal worth.
	As a Government, we have a good record of promoting those principles of equal treatment, most recently in the Equality Act 2006, which prohibits discrimination against persons because of their religion or belief. The Act specifically includes lack of religion or belief in the protected grounds. It offers protection on an equal footing to everyone, whether atheist, theist or humanist—to anyone who bases their life around a serious philosophical belief. Part 1 of the Act gives the new Commission for Equality and Human Rights as much scope to support people of no religious belief who believe that they have been discriminated against on that basis as much as any other person. I am delighted to say that the noble Baroness, Lady Greengross, is on the commission upholding those standards. Changes have occurred that have created more space in which to reflect the changing cultures of our society, as reflected in our important rites of passage. The courts already recognise that not all people wish to take an oath on a holy book before testifying and can ask to affirm. People are no longer forced to get married in a religious building or a registry office. The number of humanist funerals is increasing significantly. Those changes reflect a society that is asking for more choice.
	We had the beginnings of a debate about broadcasting. I hope that my noble friend Lord Harrison feels that his opinions on the "Today" programme have redressed the balance of that programme somewhat. I was very grateful for the explanation offered by the noble Lord, Lord Macdonald of Tradeston, of the influence that humanist groups have had on the Communications Act 2003 and the expectation that there will be a different, more expansive attitude. I hope that that will answer some of the questions asked by the noble Lord, Lord Wedderburn, but perhaps not. The freedoms that are reflected in the way in which we commission, fund and regulate our public services are really important. As the noble Lord, Lord Roberts of Llandudno, said, the question is, "What do you need?", not, "Who will provide this?". That is the crucial point.
	I listened hard to what the noble Baroness,Lady Murphy, said about the importance of all organisations that tender for public services. They must satisfy the conditions laid down by the local authority providing that service. The Government believe that the third sector is a vital component of a modern and healthy society. There are millions of acts of support, help, co-operation and selflessness every day, which are not confined to faith-based voluntary organisations. There are 22,000 third-sector organisations. They are a key part of that sector and are best placed to provide public services, so they should be able bid for contracts on a level playing field, whether they are religious or secular.
	Let me reassure my noble friend Lord Harrison that the Government do not fund or support the proselytising of organisations; they support the provision of strong, local services for all. Let me also address the point made by the noble Lord, Lord Wedderburn, and my noble friend Lord Harrison when they referred to the document, Working Together, which was published in 2001, and the work that we have done with religious groups to build a better understanding of public policy. This was not about giving privilege to religious groups; it was about being able to access and tap into an important resource—reaching into communities that are elusive and very hard to reach. It has encouraged faith groups to have more purposeful dialogue with government. I am pleased to say that the British Humanist Association agrees that the approach is coherent, and has acknowledged that it was not an exclusive process.
	We also had the beginnings of a debate about faith schools. For some parents, faith schools will be the answer; for others, they will not. I listened to what my noble friend Lord Harrison said about the difficulty of finding a non-faith school. I have taken the best possible advice about this, but I am aware of no areas of the country where there is no choice in that respect. It is important that faith schools are not held responsible for ethnic or social segregation, but it is equally important to note—we are clear about this—that although we want parents to have choice, we also want to ensure that schools bring together children of different cultures and backgrounds. The Education and Inspections Act 2006 placed a duty on the governing bodies of schools in England to promote community cohesion. Ofsted will report on that contribution, which is an extremely important step.
	Let me, in conclusion, reach into the wider work of government and the wider debate in promoting greater tolerance and community cohesion. How can we promote those shared values and perceptions which bring people together in common purpose rather than drive them apart? We are working across all sectors to create a shared sense of belonging in our country, to tackle racism and extremism through the work of the independent Commission on Integration and Cohesion and to consider how all communities can be empowered to improve cohesion. Faith-based and non-faith-based organisations play key roles in that. We support the non-faith organisations, including 49 which will shortly receive more than £600,000 to promote community cohesion. Among them will be the British Humanist Association.
	I can give my noble friends Lord Harrison and Lord Graham the assurance that they seek: we consult with and involve non-faith groups whenever we can. My noble friend Lady Whitaker requests that all local regional and national bodies convened bymy department on matters of religion, belief and community cohesion should have humanist representation. But she will be aware that the British Humanist Association was part of the religion and belief stakeholder group created by us. The British Humanist Association and the National Secular Society are active stakeholders in the development of the provisions of Part 2 of the Equality Act. The BHA acknowledges on its website the work that it does with the Government. We have a very rich and diverse range of organisations. The reason we do not engage with them all in the same way is not an exclusive choice, it is sheer pragmatism.
	In this very positive, helpful and fascinating debate, we have explored some of the most profound issues that make us what we are and make our society what it is. I have stressed the role of government in creating space for debate, for mutual tolerance, for the harmony that we spoke of in the beginning and for all to live freely in the private realm while taking care in proper public duties in order to protect all members of society. We are a tolerant and inclusive society. We must build on, expand and celebrate those traditions. I am grateful to my noble friend Lord Harrison and all noble Lords who spoke for the opportunity to explore those issues.

Lord Harrison: My Lords, it is my happy duty to thank all noble Lords, including the Minister, who have taken part in this debate, but I should report that the Church of England, fleet of foot as ever, has sought to suborn me already. Even as we were speaking, I opened my mail to discover that I have been invited to the national prayer breakfast. The final blandishment is that Members of the House of Lords are not changed for breakfast.
	I thank sincerely everyone, particularly those who spoke in sympathy with me, but also those who oppose me. I especially thank my friend—I do call her my friend—the noble Baroness, Lady Byford, for recounting her views and thoughts, and for reminding me that I, too, take sustenance from my family in this regard. The noble Lord, Lord Joffe, reminded me that although my wife and I are atheists, my wife has tremendous respect for her Aunty Florence who worked hard with Bishop Tutu in South Africa and for the Church of England. Even now when we visit churches, as we often do, to admire the architecture, my wife will light a candle on behalf of her beloved Aunty Florence.
	I was very disappointed that the right reverend Prelate the Bishop of Worcester gave the best speech. It was wise, constructive and helpful and I, too, have puzzled over those Papers for which I request. On a serious note, I look forward to taking up his challenge that we should shuffle papers together to try to build something constructive to demonstrate each point of view that has been expressed today. However, despite the right reverend Prelate's honeyed words, I have to refuse his blandishments not to withdraw the Motion and therefore not to call for papers. Even were he to offer me a big breakfast, I now beg leave to withdraw the Motion for Papers.

Baroness Warwick of Undercliffe: rose to call attention to the economic impact of higher education institutions; and to move for Papers.
	My Lords, it is a great pleasure to open this debate on the economic impact of higher education institutions. It is very good to see so many Members of this House connected with universities here today and prepared to speak this afternoon. I know that other noble Lords would very much have liked to be here. I am particularly pleased that the noble Lord, Lord Dearing, who is celebrating the 10th anniversary of his famous report, is here. As many noble Lords will know, universities have changed dramatically over the past 10 or 20 years. From being seen as ivory towers for the few, they are now perceived as engines of change in the economy and the means of effecting real social change. Who, 10 or 20 years ago, would have thought of our universities in hard-nosed commercial terms? Yet now, higher education is recognised as a substantial industry in its own right with a significant impact on the UK economy.
	According to a recent study by Universities UK on the economic impact of higher education institutions, in 2003-04, higher education had a total output of just over £45 billion. Education and education-related services are our fastest-growing export earner and have already eclipsed food, tobacco, drink, insurance, ships and aircraft. Giving these figures, I should declare my interest as chief executive of Universities UK.
	Clearly, higher education exists for many purposes. Its prime purpose is the sharing of knowledge and the development of minds. Today, however, I want to celebrate this new and very successful dimension of economic impact. It is worth pointing out that higher education institutions are also employers in their own right. Many institutions are the major employers within their localities and the wider region. For example, more than 280,000 full-time equivalentjobs are provided by institutions themselves, which amounts to just over 1 per cent of the whole workforce. Noble Lords will also be interested to know that a further 300,000 jobs across the whole of the UK are created through connections with higher education institutions.
	International students bring in £3.6 billion, of which £2 billion is from fees. UK universities are able to attract large numbers of students from overseas because of the continuing international demand for education in English and, of course, the reputation of UK universities in research and teaching. We must not forget that our international students also provide a valuable cultural mix on our university campuses and in many cases, on return to their home country, act as excellent ambassadors for the UK.
	Much of that is well understood by Members of this House, but the contribution of our universities goes beyond those very direct impacts. The UK's higher education institutions are vital to addressing many of our country's long-term challenges. I want to link the diversity of our sector with the five major strategic challenges identified by the Treasury as the context for the current Comprehensive Spending Review. I shall list them in no particular order—namely, an increase in an ageing population, cross-border competition and increasing globalisation, increasing levels of information and technologyand a more knowledge-intensive-based economy of goods and services, global conflict and international terrorism, and increased pressure on natural resources and the threat of climate change.
	Universities have a role in meeting every one of those challenges. In relation to an ageing population, higher education will help to equip the UK workforce to be more productive for longer. Our universitiesare already catering for an increasingly diverse population. Currently, 30 per cent of full-time undergraduate students are mature. Some 39 per cent of all students study part time, and 90 per cent of part-time students are over 21, with around 20 per cent in their forties and 15 per cent now aged over 50. Many of these students are undertaking study while in full-time work through continuing professional development, and indeed through work-based learning. I think the House will agree that these figures show how far higher education entry has now moved away from the traditional 18 to 21 year-old student studying for a three-year undergraduate degree away from home.
	On the second challenge, increasing levels of cross-border competition and globalisation, the Chancellor of the Exchequer acknowledged the increasing importance of higher education as an export in his speech at the Academy of Social Sciences in Beijing, China. He said:
	"In just five years the value of British education as an export has almost doubled, from £6.5 billion to £10.3 billion ... Indeed, I believe that if we continue to make the right decisions, by 2020 education exports could contribute over £20 billion a year to the UK economy".
	I think that many Members of the House would agree with him.
	On the third challenge, could any noble Lord not be aware of the rapidly expanding markets in China and India, which between them produce 4 million graduates a year? Universities are key to staying ahead of these markets by invention and innovation and by ensuring that we equip our population to work smarter. That means that we need to expand higher education, and we need to provide public investment to ensure that expansion is of high quality. The expansion of higher education will help to plug the growing skills gap and, as the noble Lord, Lord Leach, stated in his recent report, the UK should be looking at increasing skills in the workforce. He recommended that 40 per cent of the workforce should be qualified to level 4 and above. That must be broadly the right ambition, extending as it doesthe current government target that focuses on 18 to30 year-olds.
	I also know that Her Majesty's Opposition have similar views on this, as the shadow Higher Education Minister in another place, Boris Johnson, has also said that the UK should be looking at a participation rate higher than 50 per cent. Collaboration with further education is essential in this regard, and while I may have had my differences with the Minister on the Further Education and Training Bill which is currently passing through another place, retaining those progression links from further education to higher education is essential if we are to ensure that we have the right high-level skills to cope with the demands of employers and the workplace in the21st century.
	I turn now to the challenge of global conflict and terrorism, the fourth of the Treasury's priorities. Universities have a particular role in addressing this problem. World-class research departments in both the social sciences and the sciences are essential to combating and understanding that threat. Much of their work influences thinking in the police, the security services and the Armed Forces.
	The fifth and final Treasury priority will resonate with many across the House. It is climate change and the threat to natural resources. In my view, the only way to address the enormous challenge of climate change is through rapidly developing technologies that allow us to use fewer natural resources more efficiently and increase the amount of energy from renewable sources. Universities are already at the forefront of this agenda by providing some of the solutions through research and innovation, and many university campuses themselves are going green by introducing environmental targets to reduce emissions, using more energy-efficient lighting, reducing paper use and so on.
	Our universities make a substantial contribution to the UK economy and to our ability to meet the major strategic challenges of the future, but it cannotbe taken for granted. In order to deliver on that potential, we need the right level of continued investment, as so many of the contributions to this spending review make clear. I believe that the higher education sector is great value for money and certainly punches above its weight, but in order to continue to do that it needs continued investment. There is no doubt that higher education finances have improved since the turn of the century and have improved further with the advent of variable fees. However, to build on this position, we need in particular three main things, and I should like to draw them to the Minister's attention.
	The first is to maintain the unit of funding for teaching. We need a continuation of the guarantee that there will be no reduction in funding. This will ensure that the extra money available from variable fees will enable a higher quality learning experience and better sustainability. I hope that the Minister will be able to give me a guarantee that the Government are committed to this. The second issue is more money for teaching infrastructure, by which I mean buildings and equipment. There is a £5 billion backlog of infrastructure maintenance—which in itself is a great improvement since 2000, as a result of the Government's commitment to increased capital allocations. Universities need to be able to invest further in state-of-the-art teaching infrastructure to support pedagogy and to ensure that graduates are taught to the highest standards.
	Thirdly, there must be further investment in knowledge transfer, business links and other forms of employer engagement, which I know the Government are committed to. The Higher Education Innovation Fund, known as HEIF, has been extremely successful in stimulating this engagement. It has also enabled better engagement between universities and the community. I hope that the Minister will be able to reassure me that the Government will continue to demonstrate their support with sufficient funding and resource.
	I do not want to appear complacent; there is so much more that could and will be done. But the universities themselves are strongly committed to this agenda and I am delighted that this House has the opportunity today to celebrate one of the UK'sgreat successes—its university sector. I look forward enormously to the contributions of the many distinguished Members of this House who I know also feel as passionately as I do about the sector's continued success. I beg to move for Papers.

Lord Norton of Louth: My Lords, I warmly congratulate the noble Baroness, Lady Warwick, on securing this debate. I declare an interest as professor of government at the University of Hull, and I am delighted to see that two Hull graduates, the noble Lords, Lord Giddens and Lord Dearing, are taking part, along with the chancellor of the university, my noble friend Lady Bottomley.
	As we have heard—I do not propose to repeatthe figures—the contribution of higher education to the UK economy is substantial. It is essential to the health of our economy that we maintain a vibrant culture of research and of teaching in our universities.
	Applied research is fundamental to our economic future. Theoretical research is fundamental, and so too is teaching. Research and teaching are complementary pursuits: each benefits from the other. It is the quality of teaching that is essential to producing those who are wealth creators, who serve increasingly to generate a successful economy. Our economy benefits from and is dependent on the generation of well qualified and highly motivated graduates. Research contributes to the quality of teaching. Teaching generates fresh ideas and ensures that researchers can locate the relevance of their research in their discipline. Because each benefits from the other, it is possible to thrive in both. I head a politics department that is rated as a 5A department in the Research Assessment Exercise and that came top in last year's National Survey of Student Satisfaction. Pursuing both is demanding, but it is highly rewarding.
	I take one example of the economic effect. The combination of research and teaching explains the capacity of our universities to attract so many overseas students in a highly competitive market. Overseas student numbers are increasing, and off-campus spending by international students exceeds£1 billion a year. Students are attracted by the prospect of being taught by leading figures in their field. That alone illustrates the need to maintain world-class research and teaching. To do that, and here I reiterate what the noble Baroness has said, we need not only greater investment, but also to reduce burdens and provide greater certainty. As the noble Baroness said, we need to invest in order to maintain the quality of the teaching provision. It is not just a case of maintaining the unit of resource. We are teaching not only more students but, as she said, a more diverse range of students. We are expanding beyond the traditional intake of the 18 year-old A-level student. That imposes greater demands than before.
	We need to reduce the burden of bureaucracy. I welcome the fact that in many areas we are moving towards a lighter touch in regulation—but, as I pointed out in a previous debate, a lighter touch is not the same thing as a light touch. The regulatory regime may be effective, but it is inefficient and saps morale.
	We also need more certainty. It is difficult to plan ahead if one does not know what the goal is and what resources one has to ensure its fulfilment. The RAE is a case in point. We are unsure what will happen post-RAE 2008; indeed, we are not sure what will happen in the RAE itself, given the new mode of assessment, or what the financial implications will be. The uncertainty after RAE 2008, given the likely use of metrics, is pronounced in the humanities andthe social sciences, for reasons we have previously discussed. Does the Minister therefore agree that maintaining high-quality research and teaching is essential to the health of our economy, and that that entails maintaining or improving the unit of resource, reducing bureaucracy and ensuring greater certainty? If not, why not?

Baroness Cox: My Lords, I thank the noble Baroness for this important debate. I declare an interest as a founder chancellor of two of Britain's newest universities: previously Bournemouth, and currently Liverpool Hope.
	I shall focus on the link between the economic impact of higher education with diversity of provision and access for students. As already noted, the Government have declared their intention to create a diverse higher education sector, with at least 50 per cent of 18 to 30 year-olds entering higher education. The first objective is to increase choice and enhance opportunities for lifelong learning, helping to promote an educated, skilled and competitive economy.
	The second objective is to increase access by reducing historical disadvantages and encouraging all British citizens, irrespective of social background,to achieve their potential as appropriate. These proposals for expansion have been criticised, because of concerns—which I respect—about the possibility of lowering standards and the maintenance of quality. I believe that those concerns can be addressed, and that the underlying objective of encouraging access to higher education by overcoming social and cultural barriers is to be welcomed. The heritage of class difference is still strong in this country. There are still large sectors of the population with low educational aspirations, in marked contrast to many developing countries, where even the very poor have high educational aspirations. If Britain is to remain economically competitive, it is crucial that historical disadvantages and their long-term socio-psychological impact are remedied.
	I draw briefly on the experience of Liverpool Hope University's historic and current role in expanding access to higher education by overcoming barriers of gender and class and enhancing diversity of provision through its ecumenical Christian foundation. In the 19th century, Hope's foundation colleges created the first opportunities in the region for women to receive higher education, long before they were eventually admitted to universities. Over subsequent years, in co-operation with the local university, Catholic and Anglican church foundations provided opportunities for higher education in diverse colleges, until the recent legislation enabled them to attain "university" status. Now Liverpool Hope University has achieved the distinction of becoming the only ecumenical Christian university in Europe, and there are at least 14 other faith-based higher education institutions.
	Those institutions enhance choice and access, with their ethos of a long tradition of social inclusion. For example, Liverpool Hope is attracting students in a region where many communities have traditionally not been encouraged to benefit from a university education—some of the poorest and most disadvantaged communities in the country. This is making an important contribution to the local and national economy by enabling more students to realise their potential. The university is also stimulating urban regeneration and community involvement in many economic and cultural initiatives. Moreover, as an ecumenical Christian university—and this might be a counterpoint to the earlier debate—Liverpool is encouraging access for students from different ethnic and religious backgrounds; not only Christian students but also those of other faiths seek and value the opportunity to study in a university that respects and enshrines the spiritual dimension of life, where sectarianism is transcended and there is a commitment to holistic education of body, mind and spirit. In such ways it is achieving the goal of social inclusion and reducing the risks of personal marginalisation.
	In order to maintain such diversity, however, the new universities require appropriate support. With the present funding policy, a smaller group of large universities gets the lion's share of teaching and research resources. The perpetuation of a hierarchyof funding of universities does not support the Government's publicised intention to offer high-quality higher education to all students who can benefit.
	In conclusion, the challenge must be to ensure the continuation of diversity, with universities enabled to make their own distinctive contributions, without having to mimic each other to survive. I hope the Minister will give an assurance that the Government's funding policy will ensure adequate resources to enable all universities to thrive; the new ones, alongside their well established counterparts.

Lord Giddens: My Lords, I, too, congratulate my noble friend Lady Warwick on having initiated this debate. I fear she has been too successful for her own good; we only get four minutes each to speak, and most people here are used to speaking for an hour, not less. I suppose I have to declare a cluster of interests: not only am I a proud graduate of the University of Hull but I am also an ex-director of the London School of Economics and currently a life fellow of King's College, Cambridge.
	We should give not three but four cheers for universities—if that concept exists, anyway—because universities are among the greatest unsung achievements of our society and our economy. If you look at the rankings of universities across the world, you can see we have two or sometimes three universities in the top 10, we have a number in the top 50 and even more in the top 100. Only the United States has more universities in those categories. We are a long way ahead of our continental competitors in France, Germany Italy or elsewhere.
	Universities in this country are certainly a success story. The importance of this debate is that it demonstrates that universities are not just a cost to the Exchequer but actually generate enormous revenue for the country. In a knowledge-based economy, you absolutely have to have large numbers of people in higher education because of that sheer economic output of skilled labour power. We know the other narrow but important economic impacts universities have, which have been mentioned: knowledge transfer and inward investment. I aman ex-head of the LSE, which was a highly internationalised institution. I am pleased to say that it has the highest application rate of overseas students, both for undergraduate and graduate courses. The result of those economic impacts is what some students in the US have identified as a multiplier effect. It is not just that universities bring students into their local community; the money spent in the community is calculated in some American studies to be worth £3 for every £1 that is brought into the area.
	I shall finish my short discourse by entering two pleas to the Government and the Minister. First, we must give due attention in this country to resisting the creeping commercialisation of universities, especially our top-end universities. We often look to the US to see what is best, but there is a gigantic debate going on there about the corruption of universities by commercial interests, led by the ex-president of Harvard, Derek Bok. People have written books like The University in Ruins. It is a very serious issue there. We must have clear boundaries to protect academic autonomy. If you do not do that, you undermine some of the most important benefits of universities.
	My second plea is not to limit the understanding of those economic benefits simply to those narrow ones I have just identified, and which were in my noble friend Lady Warwick's speech. The more important economic benefits of universities are much more diffuse. I offer as an example the career of Tim Berners-Lee, who graduated from Oxford, worked on the margins of universities and industries and worked in CERN in Geneva and MIT. He is the inventor of the world wide web. He did not know what he was inventing, but it has had an absolutely tremendous and worldwide economic impact. For me, the top universities depend on creativity, adaptivity, and insulation from too many commercial pressures if their longer term economic interests are to be realised.
	I now move from a genius to a child in the classroom. A teacher asks Tommy, "How old were you last birthday?", and Tommy says, "Seven". The teacher asks, "How old will you be next birthday?", and Tommy says, "Nine". The teacher says, "That's impossible!" Tommy says, "No it isn't, because today is my eighth birthday". That is what I mean by lateral thinking and creativity—the basis of the impact that the universities have not only on society but on the wider economy.

Baroness Rawlings: My Lords, I, too, would liketo thank the noble Baroness, Lady Warwick of Undercliffe, chief executive of Universities UK, for securing this important debate. Yesterday, when I looked at the very distinguished list of speakers for this debate, including a former principal of King's College London, the noble Lord, Lord Sutherland, I could not imagine which would be a more daunting task—to either follow the eloquence of the noble Lord, Lord Giddens, or to be placed before the noble Lord, Lord Dearing, one of the most respected figures in higher education. Alas, I see that the House has managed to sandwich me between both the former and the latter.
	There can be no doubt that Britain's universities make major contributions to the economy and the society of the country. I would like to use King's as an example of the major positive impact made by the higher education institutions of the UK. In doing so, I declare an interest as Chairman of Council of King's College, London.
	The contribution made by King's to the economy is substantial. It is a major university institution inthe heart of London with a turnover of more than £387 million in 2005-06. It employs more than 5,000 staff. The positive economic impact of such substantial employment speaks for itself. We have nearly 20,000 students in a wide range of fields stretching from humanities, law and the social and physical sciences to virtually every kind of health discipline. More than a fifth of these students are from other countries. The presence of so many home and overseas students contributes economically, socially and culturally, not only to this capital city, but also to the country more generally. Those of our graduates who make their careers in the UK will be, through their qualifications and achievements, our important wealth creators for the economy; those who choose to work overseas will be major customers for Britain due to their persisting positive ties to this country.
	The intellectual capital generated by universities also benefits our society. Much of this benefit derives from wealth creation. During the academic year which ended last July, King's College, London, generated research income in excess of £110 million—the sixth largest in England. King's is within the forefront of income generation too, through knowledge transfer, spin-out companies, consultancy and partnerships in areas such as biotechnology and the creative and cultural industries. For example, early in the academic session 2005-06, King's won the national award for Business Initiative of the Year for its spin-out company, Proximagen, which supplies therapeutic products based on first-rate academic research into Parkinson's disease.
	As well as the financial impact of a large, multi-faculty university located on several sites north and south of the River Thames, the traditional artery of the capital city, there is the cultural impact. King's has highly productive associations with many ofour major arts institutions in London, all of which contribute greatly to income from visitors and tourists.
	In these various ways, King's and other universities are major engines of dynamic economic growth and cultural and social benefit. Especially in the age of the knowledge economy, this is a major rationale for adequate public funding for our higher education institutions. Such funding provides the base on which all these achievements rests.

Lord Dearing: My Lords, it may be no surprise to the Minister or the noble Baroness, Lady Warwick of Undercliffe, whom I congratulate on securing this well timed debate, that, in the light of the report I recently contributed to on languages, I should want to use this debate as an opportunity to urge that we realise that English as a language is no longer enough. We need to address that problem. In that context, I want to urge the Government to ally themselveswith the universities to secure a major shift in our understanding of the importance of language capability.
	It has long been recognised that the lack of languages is a non-tariff barrier to trade. Our trading partners have long recognised that and have committed themselves formidably to learning English. They have thereby gained access to our markets. We have failed adequately to perceive that if we want to reciprocate and get equal access to their markets, we must do as they have done. That applies not only to the economy but to individuals. Learning a language is enfranchising: it opens doors to our young graduates. As they mature and aspire to higher posts, it is also relevant to them.
	Our problem is illustrated in a lack of take-up of places on the ERASMUS programme. We manage around 7,000 a year. France, Germany and Spain manage three times that. I congratulate the British Council on aspiring to modify that several times, but how can it do so unless we change our perception of the importance of languages?
	I have another illustration of our problem—the lack of English-speaking translators and interpreters. The United Nations and the European Commission have expressed serious concerns about the way that the lack of such qualified English speakers has inhibited and impeded the conduct of business. The Government could help by providing funding for more postgraduate scholarships and studentships through the Arts and Humanities Research Council to promote translators and interpreters.
	In last month's report on languages, to which I referred, we urged that the Government should commit themselves to a substantial programme, in partnership with others, to get across to our people and our companies the importance to them both of capability in languages. I hope that the Government will accept that as one of our major recommendations and that they will note a particular recommendation—the appointment of a careers and languages director to get across the fact that we need these people at the highest level.
	We recommended a doubling of funding available through the funding council to enable our universities to go into our schools to get across to young people the value of languages. That was another major recommendation. We urge the Secretary of State in his guidance to the Learning and Skills Council to make languages one of our priorities for funding.I commend all those recommendations to the Government.
	Turning specifically to the universities, they have high-level language facilities and have begun making those available to the wider community. That is a very cost-effective and well equipped capability. It is highly desirable that the Government should be preparedto fund pilot projects to enable us to establish a long-lasting use of that capability for the whole community.
	For part-time students, the present high level of fees, which universities are required to charge to cover their costs, is an impediment to take-up. I hope that the Government will seriously consider how they can build in additional funding to provision of their courses.
	The greatest dangers in life are those that are not perceived. A lack of language skills is dangerous because we do not perceive how serious it is. I urge the Government to enter into this partnership with universities to address that problem.

Lord Bhattacharyya: My Lords, I thank my noble friend Lady Warwick for securing this important debate. I declare an interest as the director of Warwick Manufacturing Group at Warwick University.
	In the Budget, the Chancellor announced that the Government will spend £6.3 billion on science by 2011 and that we aim to spend 2.5 per cent of our GDP on research and development. This funding is vital because universities provide the framework for economic growth, both from building the skills base and through research. Since 1997, increased funding and the extra income from tuition fees means that our universities are prospering after years of neglect. Alan Johnson and his predecessors deserve great credit for their achievements.
	Now we need to ensure that our universities drive economic growth. The excellent 1993 White Paper from the noble Lord, Lord Waldegrave, entitled Realising our Potential, linked science, engineering and technology with national wealth creation and quality of life. The problem was that there was very little investment to go with the vision. Today, funding has increased, but the words "engineering" and "technology" seem to have disappeared from our official vocabulary. I hope that we do not also lose the words "wealth creation" because to reach the 2.5 per cent GDP target, we need to attract R&D funding from the private sector to universities.
	I remember asking the research councils to provide funding for postgraduate training on the basis of how much investment could be levered from industry for high-quality courses. The Engineering and Physical Sciences Research Council took my advice, and its system now provides incentives for academics and increased engagement with industry, and is hugely successful. That would not have happened if we had not understood the priorities of industry. Attracting private R&D funding can also create enormous wealth. I go to Boston quite often, where the number of businesses and spin-offs on Route 128 near Harvard, MIT and other universities is simply staggering.
	Here in the UK our research and teaching is of excellent quality and extremely good value for money but, sadly, our business creation performance—other than in a few universities—is very patchy, even though venture capitalists are desperate to fund new ideasin engineering research and with private sector partnerships. I remember the late Lord Butterworth, when I started at Warwick and there were huge cuts in the university sector, giving me a chair and saying, "Get on with it". I was lucky enough to find a vice-chancellor who gave me the freedom to do that. He said, "I will not interfere—get on with it. If it fails, it's your fault, and if you succeed it's our success". I did not mind because I cherished the freedom he gave me. Because of that freedom, we have attracted hundreds of millions of pounds in private funding and produced highly rated research and excellent teaching. All my equipment came from the private sector and I suspect that in my area it is the best in the world.
	I fear that the freedom I found at Warwick is still a rarity. Universities also have to deal with too much external bureaucracy when seeking state funding. The blunt truth is that universities are prepared to put up with months of revising bid forms in order to gain state funding but commercial partners are not. Speed of reaction and delivery is paramount when dealing with the private sector. We have to take risks. At Warwick, we recently decided that cyber-security will be vital to the nation. Because of our flexibility we have already been able to invest in e-security as part of our plan to build a new £50 million digital laboratory. We were able to move very fast, recruiting the best people and starting the programme within eight weeks. If we had been slower, we would have lost our edge to institutions overseas.
	I understand that if the Government are to invest in innovation, they must have some way of knowing that the funding is actually going to related projects. We should lighten bureaucracy by trusting those institutions that deliver on priorities. The principle should be that if you deliver, you receive funding, which would have the benefit of giving academic entrepreneurs the incentive to innovate and make a difference.
	Over the past 10 years the Government have delivered on the mantra of "education, education, education", at least with regard to higher education. I am sure that the Chancellor, in whatever role he takes on next, will continue to invest in such a vital part of the nation's economy.

Baroness Bottomley of Nettlestone: My Lords, I, too, give great credit to the noble Baroness, Lady Warwick, for initiating this debate in which there is such competition to speak. Like the noble Lord,Lord Giddens, I declare a cluster of interests. My great-grandfather was one of the original applicants to the Department of Trade for the incorporation of the LSE in 1901. For 25 years I was a Memberof Parliament in the constituency including the University of Surrey and I was a governor at London University of the Arts for a long time. Above all, I am privileged to be the chancellor of the University of Hull—and I dare say a great number of speakers in today's debate will be able to claim a link with the Hull mafia.
	The 2003 White Paper said:
	"To improve, institutions should be embedded in their regional economies".
	I believe that today's debate is a most remarkable example of the degree to which universities in the United Kingdom understand their role, fundamentally as centres of learning, teaching and research—and any of my comments should not in any sense be seen as diminishing that role. But universities also have the opportunity to act as a catalyst for their local economy. What distinguishes the University of Hull from those other institutions from which I have been associated is the contribution of the university within our region as a particularly important economic catalyst.
	Richard Lambert's 2004 Review of Business-University Collaboration said that businesses should look to collaborate with universities for research and development programmes. Universities must identify their areas of research strength and actively push for links with business. Lambert pointed out that in almost every case a business working with a university improves its performance, develops its products better, works smarter and sees an improvement in staff skills. We at the University of Hull take that message to heart, and I should like to demonstrate how Hull could almost be regarded as a case study of this strategy.
	A successful and thriving city needs a successful and thriving university—and vice versa. That is why the university plays an active role in regional regeneration. Its reported interaction with the region's business and community was worth more than£14 million last year, which includes a substantial contribution to the cultural life and community through music, drama, university art collections and lectures on top of the core research and teaching activity that you would expect from an established university with such an excellent national and international reputation, which the noble Lord, Lord Norton, has already spelt out. It is said that the mere presence of a university in Hull is worth more than £200 million to the local economy.
	More fundamentally, the university has been involved in helping to shape the regional economic development strategy, ensuring that the strength of its academic expertise is brought to bear, especially in identified areas of economic importance which are appropriate to the region. Those include added value manufacturing and logistics, biomedical healthcare and renewable energies. Money from the European regional development fund, not something that was available in the county of Surrey, and the regional development agency and the university itself secured an investment of £9 million in a dedicated logistics institute, one of only five of its type in the world which, through high level educational programmes and consultancy, can have a major impact on business supply chains. A further £9 million investment established state-of-the-art facilities for Hull's growing business school and a new enterprise and innovation centre, hosting pre-incubation facilities for student and graduate businesses, will open next year. It will also provide a high profile base for the university's business and community knowledge exchange, which was established specifically to ensure that the wealth of university expertise has an economic impact on the region it serves. One splendid example is Bankside Patterson. This small manufacturing company providing chassis for the caravan industry wanted a lighter but stronger design to provide a flexible product for a sophisticated market. The university's knowledge transfer partnerships programme came up with a solution that dramatically increased its turnover, profit and staffing. The university very much hopes that the Foreign Secretary will open its new facilities.
	The message of the higher education strategy and of the Lambert review has given us all a sense of optimism, pragmatism and principle, which we see very well demonstrated at Hull.

Lord Hannay of Chiswick: My Lords, one of the most striking manifestations of globalisation so far has been the emergence of a global market among higher education institutions. Of course, students and professors travelled outside their geographical or national boundaries from the Middle Ages onwards, but they did so in small numbers and those attending higher education institutions remained for many centuries a limited elite. In recent decades we have seen a massive worldwide expansion in the numbers of those benefiting from tertiary education and a smaller, but proportionately just as large, expansion in those continuing into postgraduate studies. This expansion in higher education has come when the ease and speed of travel have encouraged many to look abroad for their higher education, and when the spread of English as the world's main working language has put those with higher education institutions which teach in that language at a major comparative advantage. These developments are having a significant and potentially highly beneficial economic impact in this country so it is right that, thanks to the initiative of the noble Baroness, Lady Warwick of Undercliffe, we should be considering them.
	In the eight years I spent, up to last summer, as part of the governance of one of Britain's large universities, I was struck by the fecklessness with which Governments of both main parties piled burdens on to the backs of the universities without providing them with the resources to carry those burdens. Year after year numbers increased and more efficiency savings were demanded, so investment was skimped, maintenance went by the board and quality was put at risk. Academic salaries lagged far behind those of other parts of the economy and even further behind those of some of our main overseas competitors. These trends could not have continued much longer without inflicting the serious damage that we have seen occur in a large number of continental European universities. Luckily, the lifting of the cap on tuition fees and an increase in government spending has provided a breathing space, but no more than that. It is time we looked aheadand considered how this vital sector of our future knowledge-based economy is to compete successfully in the global marketplace for higher education. Here are one or two suggestions.
	First, we surely need to find some way to remove from the realm of party politics the provision of more financial resources for the higher education sector. At the previous general election, two of the three main parties campaigned on policies which would have inflicted serious damage on Britain's universities if they had ever been implemented. The hard fact is that the universities will not be able to look to the sort of increases in public spending they have received in the past few years, so the £3,000 ceiling will have to be looked at. Why not seek an impartial analysis ofthe options by an independent commission, thus removing the issue from becoming a political football at the next general election?
	Secondly, we surely need to make further progress in encouraging philanthropic giving and business investment in the university sector. At the moment this remains pathetically small. Partly this is a task for universities, but the Government too should be looking at imaginative ways of making such giving and investment more tax effective. Further steps in matching financing will need to follow the first modest one just announced.
	Thirdly, the whole issue of the international dimension of Britain's higher education needs more careful and systematic treatment than it has received hitherto. Universities need to be helped to devise and implement international strategies which maximise their chances of competing in the global marketplace. International students and researchers must be treated not just as cash cows to compensate for the shortfall in funding from domestic and EU students, but as an integral part of the university with their own specific needs and sensitivities. Government should be looking for ways of waiving visa fees and lightening entry procedures, not increasing them.
	Fourthly, we should be giving a lead in Europeon this sector where we have real comparative advantages. We need to boost the research budget, and strengthen the activities of the European Research Council while avoiding costly white elephants like the proposed European Institute of Technology. We should be increasing academic and student exchanges.
	This debate demonstrates beyond reasonable doubt the greatly enhanced place of higher education institutions in the economic life of this country. In purely material and utilitarian terms universities represent national assets which we need to develop and strengthen, but they are much more than that. They are centres of intellectual excellence and independent thought which are an essential part of our national life. The challenge for us is to maximise the beneficial economic impacts of the sector while not jeopardising the intangible intellectual values which the whole concept of higher education exists to propagate. That should not be beyond our reach.

Baroness Blackstone: My Lords, I too declare an interest, as the vice-chancellor of the University of Greenwich. Some speakers have emphasised the vital role of universities in research, knowledge transfer, spin-out companies and innovation, all of which are spurs to economic growth in a knowledge economy, and I endorse that. But I want to draw attentionto two other important economic roles of UK universities: regeneration and international economic development.
	If our economy and our society are to flourish, it is vital that some areas are not left behind withlow growth, unemployment, poverty and social disadvantage. The creation of the RDAs is a recognition by the Government that regeneration in our regions is of great importance. Many universities are located in the poorer areas of our big cities. This is especially true of the former polytechnics. Those post-92 universities are most likely to recruit students who live in those areas, giving them life chances that their parents' generation did not have.
	Some universities, such as my own, have developed new campuses in areas needing regeneration. These are not just situated in our inner cities in the north. The Medway towns went into serious decline once the Navy left. They are now being regenerated by the development of a big, multi-university campus, a partnership between Greenwich and Kent Universities and Canterbury Christ Church University. Two-thirds of our students who come from the Medway area stay in it when they graduate and therefore provide this run-down area with the advanced skills that it needs. For every job on such a campus, another is created in this regeneration area.
	The presence of universities in these run-down communities also leads to better public services, which are essential to create the conditions for private sector investment. For example, in the University of Greenwich 56 per cent of nursing students come from the Thames Gateway and 66 per cent go on to work in the area. Forty-nine per cent of teacher training students come from the Thames Gateway and 45 per cent of teaching graduates go on to work there. University research expertise will also attract more business into regeneration areas.
	I want to explore universities' international role. We have heard about the enormous contribution that universities are making to our own economy through the export of higher education all over the world. We are competing successfully in a tough global market. Many students are coming here from countries such as India and China but we must not forget Africa in any discussion about the international and economic roles of universities. It needs economic growth and development too. Without it, it will suffer from poverty, war and the ensuing famine and high levels of mortality. That in turn will lead to long-term dependence on development aid. Universities in the United Kingdom are contributing to economic growth in Africa in various ways. I give just two examples from my own university. Our Natural Resources Institute provides programmes for graduate students from developing countries and does research and consultancy working with African institutions to improve agricultural productivity, crop development, and food marketing to create the agricultural surpluses which allow African countries to acquire the goods and services that they need to compete in the global market.
	The second project is an EU-funded project with some UK government support that is being undertaken by my university with Coventry. We are working with universities in South Africa and Ghana to support new small and medium-sized enterprises in poor townships. This is another form of regeneration in an international context. I hope that the Minister will agree that we need to continue to fund universities to regenerate our poorer areas and to support their activities in helping the economies of developing countries, especially in Africa.

Lord Geddes: My Lords, I join other noble Lords in congratulating the noble Baroness, Lady Warwick, on her success in the ballot for this debate. I hope that I may be allowed to concentrate on the narrower focus of the specialist arts institutions. I declare an interest as a non-remunerated director of Trinity Laban, a conjunction of Trinity College of Music and the Laban Dance Centre. It is with pride that I say that over 90 per cent of recent alumni from Trinity Laban are in employment.
	It may be obvious that the idea of a distinction between a knowledge economy and a culture economy is not yet common currency, but I believe strongly that that lies at the heart of the case for the specialist arts institutions in higher education. At our leading universities, the value of higher education is, dare I say it, obvious; what is often neglected is the value of the smaller, specialist higher education institutions. The overwhelming majority of the United Kingdom's orchestral players, opera, theatre and dance company members and successful freelance practitioners are conservatoire trained. Any erosion of the sector's funding base would lead to a sharp decline in the number of British performers in our orchestras and performing arts companies, as well as a break in the supply chain of artists to support the wider cultural infrastructure, including arts education and particularly participation for schools and communities.
	The cultural sector also produces significant and growing economic benefit in areas such as tourism and neighbourhood regeneration, as pointed out by the noble Baroness, Lady Blackstone. Any assessment of tourism income will feature our cultural life. This country is the capital of live theatre, much of it music theatre, which generates huge net contributions to the United Kingdom economy. The public investment in performing arts conservatoires is extremely modest, at less than 1 per cent of the total HEFCE recurrent funding for higher education institutions in 2007-08, but it delivers huge returns. If the standards of cultural performance were to drop, there is no doubt that a significant part of the £75 billion income generated by tourism and the 2.1 million jobs that go with it would drop also.
	We all know of the continuing high street battle between the supermarket and the bespoke retailer. Is it stretching credibility too far to equate our excellent universities with the supermarkets and the specialist arts institutions with the bespoke retailers? Just as in the high street, we need them both. We also needto encourage and continue with the Arts and Humanities Research Council. With the proven economic advantages to the country of the arts, a developmental base is vital. We cannot afford to sit on our artistic haunches; we must keep our edge.
	The conservatoire sector is not an expensive luxury but a gem in the higher education firmament, which needs to be encouraged as a leader of the culture economy, now over 7 per cent of the national economy and growing fast, in which Europe and the United Kingdom have a natural advantage. The very small investment that we make in specialist higher education institutions is more than justified by the income that it generates, and it must be sustained or increased in the face of any economic pressure to restrict it.

Lord Carey of Clifton: My Lords, I join other noble Lords in thanking the noble Baroness, Lady Warwick, for introducing this debate. We have heard from her of the outstanding contribution that universities and colleges make to the economy of our country, tosay nothing of their major influence on shaping knowledge, art and culture. Britain has much to celebrate in the success of our places of higher education. Although in numerical terms a small nation, we punch above our weight and have an enviable reputation for producing scholars and scientists of extraordinary stature.
	However, we cannot be complacent, as we have heard. To stay ahead in a world where knowledge rules demands investment at every level. I declarean interest as chancellor of the University of Gloucestershire, one of the youngest of the universities created since 1992, although with roots that go back to the 1830s. I am proud of what our university is achieving under the effective leadership of Professor Patricia Broadfoot. As with other newer universities, our regional links are extensive and we make a substantial contribution to the regional economy. Our university was among the first to recognise the importance of learning, living and leading in areas pertaining to environment and ecology. There is much more that I could say about our university in the West Country; we have a dedicated and able teaching staff and well motivated students. We are confident, although not complacent, about our future.
	Much could be said, in a similar fashion, about other universities up and down the country. There is no need to plead the case for recognising the significant and unique role of our places of higher learning. Everyone knows that if a knowledge deficit opens up between ourselves and the powerful economies of China and India, we shall one day rue the consequences. I am sure that the Minister will assure us of the continuing and unwavering commitment of the Government to higher education, but there are two questions that I want to press. First, echoing the noble Baroness, Lady Cox, are the Government committed to sustaining the role and the future of newer universities as well as older places of learning? There is a tendency these days for some to speak of "leading" universities, by which is meant Oxbridge and research-intensive universities. Without undermining the needs of such universities, it is crucial to recognise the work of other places where the same commitment to learning goes on and where research is also maintained. One of the strengthsof UK universities is their diversity, and newer universities are well known for the development of student potential as well as innovation in new subjects of study.
	Secondly, the issue of funding research in newer universities has been mentioned by several noble Lords and demands re-examination. The Government's policy of concentrating the increased research funding through the science and innovation budget in a smaller number of universities has resulted in many institutions struggling to keep research going. The Minister will be aware of the Arthur D. Little report of June 2006, The Social and Economic Impact of Publicly Funded Research. It concludes with the very firm view that the research resources of our newer universities,
	"constitute a national asset of enormous significance".
	Can the Government assure the House that newer universities, such as Gloucestershire and Liverpool Hope, will be adequately funded to ensure that they retain and develop the research capacity that befits a higher education institution?

Lord Morris of Handsworth: My Lords, like other Members, I begin by declaring an interest. I am chancellor of Staffordshire University and a recently retired member of the board of London South Bank University. Although it is not relevant to this debate,I am also the chancellor of the University of Technology in Jamaica.
	This debate provides the opportunity for your Lordships' House to consider the new and changing role of higher education institutions. In addition toits traditional role of knowledge transfer, today the sector is very much engaged in regeneration, as the noble Baroness, Lady Blackstone, reminded us. It is also building social capital while rolling back the frontiers of knowledge in new fields, including climate change.
	In the changing world of work and society, the values of higher education institutions are firmly grounded in their communities, training students to be work-ready, while building economic and social partnerships. I offer two brief examples. At Staffordshire University, we are housed on three campuses, one of which is Stoke-on-Trent. Once an important industrial and creative centre, the town now struggles to create jobs. Although it is not inthe premier league of innovative investment, the university, in collaboration with Stoke-on-Trent College and the sixth-form college, is building a university quarter that will see the regeneration of a large part of Stoke around the once-thriving potteries industry. That project is not being undertaken in a vacuum, but in full partnership with the community, which is consulted at every step. The project is a good example of public and private sectors working in partnership to build social capital.
	London South Bank University has establishedthe London Knowledge Innovation Centre, a joint venture with the business enterprise agency for Southwark. The centre provides incubation space, business advice and support to assist aspiring entrepreneurs to turn their innovative ideas into thriving businesses. As we have heard today, many more exciting projects are being undertaken by the higher education institutions sector, contributing billions to the UK economy.
	Those are only a few of many common examples of economic impact. I support the call for investment and the call from the noble Lord, Lord Norton of Louth, for a lighter touch. I hope that the Minister can assure us that bureaucracy will not strangle the creativity and innovation spoken of in today's debate. Our higher education institutions recognise that their community is now worldwide. They are reaching out to build relationships throughout the world through positive recruitment. Many higher education institutions have adopted Ghandi's philosophy of thinking globally but acting locally. They are also building social capital.

Lord Sutherland of Houndwood: My Lords, in my youth an Australian comedian called Bill Kerr used to open his radio routines by saying in droll tones, "I'm only here for four minutes". I now know how he felt. I want to use my four minutes to take noble Lords through two examples of lateral and innovative thinking in the university sector that boosts UK plc. and contributes significantly to our economy.
	On the first examples, I had thought that I might be the first to mention in this debate the place of music and music colleges. I am delighted that the noble Lord, Lord Geddes, has been there, and I follow him enthusiastically. The Associated Board of the Royal Schools of Music is a charitable company established for the benefit of music education by the four UK royal schools of music: the Royal Academy of Music, the Royal College of Music, the Royal Northern College of Music and the Royal Scottish Academy of Music and Drama. I declare an interest: it is my privilege to chair that board.
	You might not think that this charitable company was a natural clone of the spin-out companies that we have seen elsewhere. It is not, but 600,000 candidates are examined annually by that board in the furtherance of musical education. The revenue coming into this country from overseas constitutes over half the board's earnings; roughly £25 million is earned from examining, roughly half of which comes from the 90 different countries in which the board moves and examines. Those 90 countries boost the numbers of candidates each year—by 4.3 per cent last year.
	The same board is not only involved in musical examination but taking the business of music education further in innovative ways. It has been nominated by Webby, which the techies among noble Lords will recognise as the organisation that internationally gives awards for the best websites in the world. The board has been nominated as oneof five finalists internationally in the category of education for its website SoundJunction, which combines high technology and music. It is a classic example of niche institutions not simply staying in their small corners but expanding their range of capacity and interest in ways that benefit them and the cause of music education in this country—with all the consequences to which the noble Lord, Lord Geddes, pointed—and creates income for Great Britain plc.
	My other example is that of a different form of innovation and involves my old stamping ground, King's College—I was delighted to hear such a positive story about the college from the noble Baroness, Lady Rawlings. I declare an interest as an educational adviser to the Malaysian company YTL, one of the major companies in that country's stock exchange. The company was exploring ways of benefiting education in Malaysia. Conversation focused on improvement of schools through the devolution of increased autonomy, a theme to which the Minister might warm. The outcome was that three weeks ago I was in Kuala Lumpur at a ceremony hosted by the Malaysian Minister of Education, where representatives of King's College London signed an agreement to provide training for future head teachers in Malaysia—initially up to 150 over the next three years. The impact of that in terms of Britain's influence is significant. The earnings come back to this country, and a great deal of the training will take place in this country, although clearly some of it will be based in Malaysia.
	Different factors came together: the wish ofYTL to enhance Malaysian school education; the Malaysian department's recognition of what was happening in this country in terms of pushing out the boat of education autonomy; and the reputation and excellence of King's College, London, in the joint fields of education and professional leadership training. Without that excellence, the other bits ofthe jigsaw would not have fitted together. It is a marvellous story and a niche story, and I simply hope that, as the Government and the funding councils consider the impact of universities and colleges, they allow for such lateral practice and thinking to have a very high impact.

Lord Bragg: My Lords, I, too, begin by congratulating my noble friend Lady Warwick on securing this important subject for debate. I intend to concentrate on the economic impact emanating from Leeds University, of which I am chancellor. Like others in your Lordships' House, I think that the detail will provide a useful and encouraging microcosm of the range and intensity that a university can bring to both the local and national economies.
	Leeds has a £340 million income, which generates a total of £870 million as an output. It creates 7,500 direct jobs and a total of 15,000 in local economies, and houses 4,000 international students, who generate £20 million a year. We have more than 30,000 students in the city, who help to keep buoyant the local economy and the city's culture.
	Leeds University is the third largest employer in the city after the NHS and the city council. The knock-on impact of employment in universities is about 200 per cent greater than that of a similar volume of employment in the financial and legal sectors. Leeds currently has 44 active spin-out companies, three of which have been floated on the Alternative Investment Market. The university runs a graduate start-up programme that has created 70 companies since 2002—for example, the GETECH Group,which provides gravity and magnetics services to the international oil and mining industry. It was floated on the AIM last year, raising £3.2 million. Arts-stra, created three years ago by a former arts student, is now a successful arts consultancy with clients including the BBC and Channel 4.
	Leeds supports private and public sector businesses to innovate and remain competitive and effective through product and process development and work-related learning. In 2005-06, there was£27.5 million-worth of user-driven research and 350 to 400 companies were assisted per annum. One final cluster of facts is that the university runs six centres of industrial collaboration for supporting regional industrial clusters, provides an innovation hub for the bioscience/health sectors, and is developing lifelong learning programmes for disadvantaged groups. It is a great success story. Leeds University is primarily a centre for scholarship; it is also, increasingly, an initiator of valuable ideas for the development of the economy.
	There is also the immeasurable and vital law of unexpected consequences at any university. I suppose that Isaac Newton is the key example in our academic galaxy. In the 17th century, as your Lordships are aware, Newton, at Cambridge University, wrote a book in Latin using Greek geometry to invent modern physics, and today it is still literally making the working world go round. Examples can be multiplied a thousandfold. In the sciences—even in some of the humanities—there is rarely such a thing as pure research. Everything which uncovers new ideas about our lives, the planet and the universe can become a driver of future prosperity in scholarship, commerce, technology and social organisation.
	Finally, in my opinion, universities contribute vastly to civilising the mind and estate of the country in which we live in unprecedented numbers. They are educating thoughtful, rounded young people, whose well trained intelligence is far and away the best hope that this country has for a secure and prosperous future.

Baroness Deech: My Lords, I start, like many others, by thanking the noble Baroness, Lady Warwick, for giving us the opportunity to discuss this important subject. I declare my interest as the Independent Adjudicator for Higher Education, a new post replacing the old jurisdiction of the visitor. My office has so far issued more than 1,000 decisions on student complaints and has handled many more inquiries and applications. Therefore, in my job I see the seamy underside of student life.
	Universities are coping extremely well and I am second to no one in taking pride in their economic impact, but it comes at a cost. The economic impact is on society as a whole, rather than as a benefit to individuals, which is why the resources of universities are a proper claim on the state. To prove my point, I commend to your Lordships the annual Sunday Times rich list. I am sorry to say that you have to go a very long way down it before you come across anyone who has made their money from education. The people at the top of it have married wealth, divorced it and inherited it, so to go into higher education for personal gain is not a sensible ambition.
	Consumerism has no place in higher education. One should go for the love of study, out of a willingness to make a contribution to the well-being of others, for scientific curiosity, and to grow up.The Government's policy of increased participation, which is wonderful, means increased costs to the individual and a greater personal and family financial investment, and therefore greater disappointmentif there is failure. The cost of failure or underachievement is much higher in a competitive jobs market. The blame for underperformance is more likely to be attributed to the university's failings.
	There is, of course, a growing legalism and rights culture. The QAA and my own office give quality assurance. I have to report with some interest that the complaints that we receive from overseas students—in particular, non-EU students—are higher than their proportion in the universities warrant. The complaints that we receive from students studying subjects allied to medicine—not medicine itself—are considerable, followed by business and law. The least complaining are those doing agriculture and veterinary science. But I am concerned about the happiness and welfare of the foreign students who play such a large part in the economic impact of our universities. We must be sure to give them an experience that they have come for; they appreciate quality. It is important to welcome them and make sure that we give them an attractive experience, bearing in mind the cultural differences.
	Mobility is not as easy as it seems. Moreover, we have a very high dependence, as your Lordships know, on our foreign students. Some universities' economies would be severely hit were the numbers of overseas students to drop. We have to attract and support them. We need special training for lecturers to deal with foreign students. We need integration with the host community, accommodation and marketing.
	That brings me back to my opening theme that the commercial value of the universities lies not in revenue streams over the centuries, nor in individual wealth, but in the education of an ambitious, articulate new generation with intelligence and intelligibility, citizenship values, a sense of place in the world and, if we are fortunate, the scientific skills to advance the welfare of all mankind, whether through medicine, technology or environmental sustainability.

Lord Paul: My Lords, I, too, am grateful to my noble friend Baroness Warwick for raising this important debate, and I congratulate her on the good work she does to promote higher education as chief executive of Universities UK.
	The issue of the economic impact of higher education will always require constant monitoringas this must be one of its main aims and willalso influence how much money is spent on our universities. I declare an interest as chancellor of two universities—Westminster and Wolverhampton, and I shall summarise briefly what we in these universities have accomplished to date, since both are substantial businesses in their own right.
	The University of Wolverhampton, based in the West Midlands, had total revenue of £129 million last year. The university itself spent £126 million and attracted 3,385 non-UK students, who spent a further £16 million off campus. It provided 2,319 full-time equivalent jobs across a range of occupations. Overall, its activities generated £324 million of output in the UK—about £220 million in the region, and £103 million in the rest of the UK. Its overseas revenue of £7.56 million, plus off-campus expenditure of overseas students and visitors, generated £24 million of export earnings.
	Meanwhile, the University of Westminster, which has 24,000 students in London, and employs 2,000 staff, has annual expenditure of £140 million. Its estimated contribution to the national economy is between £500 million to £800 million through expenditure on salaries, services, research and knowledge transfer.
	Both universities have strong records of widening participation and of producing economically active graduates. At Westminster, 44 per cent of first degree students come from lower socio-economic groups, while at Wolverhampton the figure is 50 per cent. The University of Westminster is a major provider of part-time education with 10,000 part-time students, 40 per cent of whom are postgraduates.
	It helps more than 1,000 small and medium-sized companies through the WestFocus Knowledge Exchange giving support in such growth areas as creative industries, information technology, materials and health.
	Wolverhampton also has more than 10,000 part-time students. Over the past six years it has delivered business support services to more than 5,000 businesses and 13,000 employees. Therefore, these two universities, strongly embedded in their regional communities and with international activity, are between them making a contribution of some£l billion to their regional, national and international economies. Universities must be constantly aware that they must respond to the needs of the economy and the demands of the students for modern and relevant programmes which will equip them for employment and the challenges of the new globalised world and economy.
	On a different note, I congratulate the Government on their newest initiative, allowing international students to stay in the UK for a year after graduating to gain work experience. That will be of great help to international students and their families. It will also benefit the universities, as it will attract more students from overseas. It will particularly help universities such as Westminster, which is making great efforts to be a global institution.

Lord Butler of Brockwell: My Lords, I congratulate the noble Baroness, Lady Warwick, on obtaining this debate. I declare an interest as Master of University College, Oxford.
	The noble Baroness spoke eloquently, as have other noble Lords, of the wide contribution that higher education makes to employment, exports and our culture. I shall concentrate these few remarks on research. There can have been few periods in history when opportunities have been greater for advances through intellectual effort and applied research. Research attracts money, not only from research councils in the UK, but from sponsors of all sorts. It is important for current economic activity but, of course, its significance spreads far more widely than that. It supports advances which address both the world's needs and—as the noble and right reverend Lord, Lord Carey, has said—give our country a competitive edge against the lower labour costs of the Far East.
	To their credit, the Government have recognised the importance of this national asset. Their support for research, through the Science Research Investment Fund and in other ways, has been strong and commendable. Coming from Oxford, I pay particular tribute to the Government for their staunch support for the construction of Oxford's biomedical research facility against the obstruction of animal rights protestors.
	I make two points about the future. I read a press report last week saying that a number of universities are offering incentives to obtain the best researchers, in the expectation that cutbacks in the Comprehensive Spending Review will reduce the overall supply. I make no complaint about the competition for research funds being tough. While the UK's share of the most highly cited research papers is second only to the United States', we also have more than our fair share of the least cited papers. This suggests that it would be a mistake to spread the available resources more thinly at the expense of supporting the best.
	Lest the noble and right reverend Lord, Lord Carey, should think that I wish to deny funds to the newer universities, my second point is that the cap on tuition fees means that money that could be spent on research has to be diverted to subsidising teaching. The fact that HEFCE's teaching grant plus tuition fees is less than the cost of teaching undergraduates means that the deficit has to be made good from elsewhere. It is a tax on the research so crucial to the UK's economic future.
	The irony is that this can be put right without cost to the taxpayer. Recent surveys show that students are prepared to pay a higher tuition fee than the current limit of £3,000 for high-quality higher education. It is to be hoped that, when the Government review the tuition fee in 2009, they will raise the threshold to a level that more accurately reflects the cost of undergraduate teaching and thus release funds for research, which is the life blood of our national economic strength in the future.

Baroness Lockwood: My Lords, I will illustrate the tremendous change, almost a revolution, that has taken place in higher education. I do so in the context of Yorkshire Forward, with its 10 universities and four HEIs, and Bradford University in particular, with which I have been closely associated since 1981.
	At that time, Bradford was exceptional in its work with industry, largely national and international—there was little at the local or regional level. The university was badly affected by the 1981 cuts. The picture is vastly different today. According toPhil Coates, pro-vice-chancellor for research and knowledge transfer at Bradford, Bradford's supply chain stretches from the personal to the local, to the regional and through to national and international levels. Its profile is one of being on top for graduate employment, widening participation and knowledge transfer, and it is also at the leading edge of science, including that of polymers and micro-technology and nanotechnology. It is also a driving force in the city of Bradford's regeneration process. It works closelywith Yorkshire Forward, which quickly recognised the contribution that the sector could bring to the regional economy.
	The 14 higher education institutions have a combined turnover of £1 billion per annum. As a percentage of the region's gross domestic product, it is estimated that, directly and indirectly, the sector generates £3 billion of output and that, by 2010, nearly 10,000 new jobs will have been created, about half of which will be in the universities. As a percentage of the region's GDP, Yorkshire and Humber is recognised as the largest sector outside London.
	Co-operative working by Yorkshire universities in all its guises has changed enormously. I will give a few examples. First, on graduate retention, the Yorkshire scheme is recognised nationally as one of the best examples of collaboration. Secondly, the graduate enterprise scheme works on linked activities promoting enterprise and entrepreneurialism among students. Thirdly, Knowledge Rich brings together all universities with Yorkshire Forward in facilitating appropriate expertise for use in business and in developing clusters. Fourthly, Yorkshire Forward was the first regional development agency to set up the secondment of a senior academic to act as a translator between the RDA and higher education institutions and to have regular officer and vice-chancellor meetings.
	Those examples do not just happen. Increased funding has facilitated the change and needs to increase even further, but there is a new enterprise culture that has replaced the ivory tower image and which provides a real buzz in our universities today.

Baroness Valentine: My Lords, I join previous contributors in thanking the noble Baroness for securing this important debate. What can be more important to the future success of our country, economically and otherwise, than a thriving and responsive university sector where young people and others can explore their potential alongside the best students from around the world and where pioneering research takes place, with resultant opportunities for business and benefits for us all?
	I declare an interest because London First, of which I am chief executive, counts many higher education institutions among its members, alongside some 300 of London's leading businesses.
	London is a centre of excellence in higher education in both UK and world terms. Some 41 of the UK's 160 universities and HE colleges are in the capital. They attract £90 million of foreign investment in research and 83,000 foreign students. So the economic impact in London alone is substantial and positive, but it could be bigger and better. Thereis untapped potential which requires stronger partnerships between higher education and business.
	I know that some educationalists think that universities need business like fish need bicycles and that private sector leadership and entrepreneurship might somehow wash away the high educational ideals upon which colleges and universities were founded. But that shows a lack of self confidence. Business values the intellectual leadership presented in higher education. Intellectual leadership and knowledge transfer are the vital ingredients for an economy based on knowledge and high added-value business services. For the UK to retain a competitive edge over international rivals, we have to stay ahead intellectually and in pursuing and applying cutting-edge research.
	"Knowledge is power" is the cliché. The real truth is that applied knowledge strengthens economic power. For UK plc to stay ahead of international competitors, we have to take advances quickly from the cerebral to the experimental, from research to development and from there to application. Some might say that it is time that we "sweated" our academic assets more. It is an ugly expression, but it is used in the commercial world to describe getting better value from underused premises, equipment or other resources. In the case of our universities and HE colleges, the assets to be sweated are mainly intellectual rather than physical. They represent the key to our future competitiveness.
	How can we release all this potential, apply our knowledge and strengthen our economic power? We can do so by building much better practical working relationships at all levels between academia and industry. Both the HE sector and business need to be more open to each other. Those in higher education have to recognize that business must make profits and that it is not somehow dirty to do so. Our university sector must sell its intellectual assets, be it research, training services or graduates, in a competitive and globalised world. If they fail to be competitive, they will discover that UK businesses will not feel bound by patriotic loyalty but will buy elsewhere.
	Business should in turn recognize the strength of the HEIs' offerings that are often literally on their doorstep. Engaging with an American or Japanese university may seem more glamorous, but the knowledge and expertise that UK companies seek is very likely sitting in a UK University. Perhaps I may put in a word for some of the new universities. Some of Britain's best graduates—those who have often triumphed over less than privileged backgrounds—emerge from modern HE institutions to find themselves unfairly discriminated against by employers.
	Fruitful partnerships between UK business and higher education are already there, waiting to be developed, imitated or multiplied. Let me mention just one. The Praxis programme, founded out of the Cambridge-MIT Institute, brings together advisers from HE and industry to deliver thorough professional training in technology and knowledge transfer. It is creating a well-skilled interface to enhance business sector access to HE-generated knowledge and technology in the UK.
	As in so many walks of life, if academia and industry do not work harder at hanging together, I am sure that our international competitors would be delighted to see them, and the UK economy, hang separately.

Lord Wilson of Tillyorn: My Lords, I should first declare an interest as master of a Cambridge college and as chancellor of the University of Aberdeen.
	What does one say towards the end of debate such as this one when there have been so many cogent and powerful contributions? Perhaps I could concentrate on two things. The first is what can be achievedby a major centre of research excellence such as Cambridge—not because Cambridge is unique in this, but just as an example. The second is the value of what one might call the community of scholars. Last year, a consultancy did a study called The Impact of the University of Cambridge on the UK Economy and Society. It is a mine of information on precisely what this debate is about. It would be quite wrong, and I think tedious, to quote extensively from that study. But I should like to pick out one or two points.
	First, there is the astonishing fact that the University of Cambridge has been the home of81 Nobel Prize winners. That is more than the number for any other country—country, not university—in the world except for the United States and, of course, the UK itself. Incidentally, four of those Noble Prize winners came from my own Cambridge college albeit it is the smallest one, so size is not the only thing that matters.
	Another point arising from Cambridge is the great story of the unravelling of the structure of DNA by Crick and Watson. The study which I quoted reckons that, worldwide, that has produced more than$100 billion of investment in biotechnology. That is some economic achievement. Then more recently, in February this year, there was the opening of the Li Ka Shing Centre, a splendid new facility for research into cancer. It has made Cambridge the largest cancer research facility in the whole of Europe.
	What is so instructive in addition to those developments is how a great centre of research expands outwards into its surrounding geographical areas. Due to the "Crick and Watson effect", as it were, Cambridge now has 200 biotech companies,the largest concentration in Europe. There is also the cluster effect in the larger area, 15 miles around the university, with 900 high-tech companies employing some 27,000 people and producing a massive annual income.
	There is another cluster effect which I think isjust as important: the cluster effect of having a community of scholars, or in the case of a university such as Cambridge—a collegiate university—a college community of scholars. I mentioned Crick and Watson and the unravelling of the structure of DNA. I was told earlier this week, by somebody who was there, about a dinner in my college, Peterhouse, where Crick and Watson were both present as young men. So too was a less well known Australian biochemist, Irwin Chargaff. During conversation Chargaff told the two of them about work he had been doing on DNA. It was the vital clue. The rest of what happened following that dinner in Cambridge is not just history. It is the double helix and everything that has changed our lives since. That is the value of a scholarly community.
	The scholarly community applies also at the other end of the spectrum—among students. Young people from all sorts of social and economic backgrounds and from many different nationalities live and operate together and talk across the barriers of different subjects and different cultures. All of this gives these highly talented young people, brought in simply because they are talented, a chance to develop their true potential.
	Perhaps it is not possible to measure the direct economic impact of all this, and perhaps, as the noble Lord, Lord Giddens, said, one should not do so.The important point is that they make a great contribution to society here and around the world. I pick up on another point made by the noble Lord, Lord Giddens. I hope that the role played by great research institutions will be affirmed by the Government. That is not to undermine what my noble and right reverend friend Lord Carey was saying about the role of newer universities; just to affirm what is being done by research universities.
	Perhaps I may conclude by quoting Confucius. After all, he has been around a great deal longer than even the oldest of British universities. That great Chinese classic, the Analects of Confucius starts, freely translated:
	"The Master said: 'Is it not a great joy to study, and, in a timely way, to make use of what one has studied?'".
	I believe that the universities of the UK, all of them in their different ways, provide the opportunities for just that.

Baroness Sharp of Guildford: My Lords, I join other noble Lords in thanking the noble Baroness, Lady Warwick, for stimulating this timely debate. I also declare an interest as an honorary fellow of Sussex University, of Birkbeck, and, recently, as an associate fellow of Newham College, Cambridge.
	This wide-ranging debate has celebrated the success, diversity and importance of the university sector in the UK. The noble Baroness, Lady Warwick, began by referring to a document produced by Universities UK, The Economic Impact of Higher Education Institutions, which gives the total value of higher education institutions' impact on the UK economy as £45 billion. That may seem a large sum but is only 4.5 per cent of UK GDP. I think that the report underestimates the value of universities to this country. I admit that it uses input/output analysis and takes account of indirect effects but, essentially, it presents a static photograph of the impact of universities. Our discussion today illustrates that the impact is dynamic over time rather than one that can be captured by a still photograph at one point.
	I illustrate that with some work that, I confess, I did 15 years ago at the University of Sussex. We considered a question posed to us by the Treasury: what do we get from spending money on basic research? We began by looking at a lot of surveys, which considered how far industry uses university research. The answer was that it did use it and that, the longer the term for which you look at it, the more use they made of it. The pharmaceutical and electronic industries—the high-tech industries—and the motor car industry, in design, and even the low-tech industries, such as mining and agriculture, are thoroughly dependent on the output of ideasfrom universities. That was captured in work by an economist called Mansfield. His reckoning—I must say that I think that it was rather a back-of-an-envelope reckoning, but it has been widely cited—was that the long-term rate of return on basic research was 38 per cent on average.
	That is where our work started. As we delved into the matter, we recognised that the key benefit to the economy from basic research came from the training of individuals. The concept is simple. Less than 10 per cent of the scientific publications in the world come from the UK; therefore, about 90 per cent come from other countries. If we are to make use of that contribution, we must have scientists working at the leading edge of science and technology so that they can understand the ideas in those publications, use them and apply them in the areas in which they are working. Those highly trained scientists and engineers must be the receptors of that knowledge and the translators of it for industry. Technology transfer therefore depends crucially on individuals.
	The dynamic effect of that over time is considerable. If we did not have those trained people working at the leading edge of technology, the innovation potential of the UK would be very little. We need to look at the university sector far more widely than the document does. Let us take teaching, for example. I was much taken by what the noble Lord, Lord Giddens, said about simply having to have many people trained to higher educational level in a knowledge-based economy, because we need the creativity and lateral thinking that come from that education. The noble Baroness, Lady Deech, also made that point. In my preparation for the debate, I went back to the report written by the noble Lord, Lord Dearing, in which he quoted from Ernest Boyer's article on the scholarship of teaching, which we considered in 1990:
	"great teachers create a common ground of intellectual commitment. They stimulate active, not passive, learning and encourage students to be critical, creative thinkers, with the capacity to go on learning after their college days are over".
	Picking up again the Dearing concept that at the centre of education must be the student, surely the greatest output of our universities is training young minds to think for themselves so that they can hold down jobs where they are required to take decisions and to hold substantial responsibility for those decisions. This is why the CBI says that 60 per cent of future recruitment will be of graduates, because this is what industry wants from our graduates. However, as the noble Lord, Lord Morris of Handsworth, said, we should not forget that we are also training students to be work-ready. Universities increasingly fulfil that function. If we think about it, professions suchas accountancy, business, medicine and its allied professions, law, engineering, information technology, media and communications, and teaching and education, all of which provide a great deal of our GNP, are now graduate professions. Our universities also deliver a good deal of our vocational training.
	It is acknowledged that basic research in universities provides the seed corn for innovation,and in turn that innovation underpins our competitiveness. For a long time, the universities were seen too much as ivory towers, tied up in their own ideas and not sharing them with others. However, as the noble Baroness, Lady Lockwood, said, this is no longer true. The Lambert report documented a sea change in the culture of our universities, which are now positively seeking out industrial partners. The problem, as the Lambert report also documents, lies with the reluctance of British industry to do its part and invest the resources necessary to develop and exploit these new ideas.
	Increasingly, it is also realised that, in the world of the knowledge economy, universities provide a dynamic nucleus for regional economic growth. Noble Lords have cited many examples today of the contribution made by universities in this respect. The noble Baroness, Lady Bottomley, talked aboutthe contribution made by the University of Hull, and the noble Baroness, Lady Blackstone, talked about the regenerating effect in the Thames Gateway. Universities are now playing this vital role in their regional economies. They are big employers in their own right in all sorts of labour. They provide high- and low-skilled jobs, and are a focus for training in higher-level skills. They act as incubators for new enterprise and provide expert advice and consultancy for existing enterprise. I was very pleased that the noble and right reverend Lord, Lord Carey, mentioned the Arthur D. Little report, because it is not only our research-intensive universities that are doing all this. The report found that the 35 less research-intensive universities levered three times more contract income from public research funding that they received than the more research-intensive universities. That illustrates so well the fact that universities actively support a whole range of industrial and business services in their local areas by working with their RDAs and providing a dynamic nucleus for those economies.
	Finally—we have heard a great deal aboutthis—universities contribute a great deal to the international balance of payments. We hope that the students who are trained in this country and by this country overseas retain good feelings towards Britain, and through those links go on to work with service providers and equipment manufacturers who can meet the needs in their own countries. Put together, the impact of these dynamic influences is enormous and is talked about in the regional economy. Increasingly, the picture that emerges is that our universities provide the dynamic nucleus for this country as a whole.
	I should like to add a slight caveat to what I have said on two issues. First, the success of our British university system has happened because we have been able to individualise education for personal needs. Overseas students come here because they get contact with senior members of staff. The success of teaching comes from knowing individual students and being able to help them to know themselves, which is part of the creativity. It is vital that we retain that tradition. I endorse wholly the request of the noble Baroness, Lady Warwick, and other noble Lords that we maintain the current unit of resources. Teaching is stretched to the limit. We need more resources, if possible, to maintain teaching levels. We cannot squeeze them further.
	Secondly, universities have grown up within a collegiate system, which has contributed a great deal to the open discussion of ideas and, therefore, creativity. The collegiate system is not part of the market system and it would be dangerous to make it too much a part of it. We can go so far in developing business methods of running universities, but, in so doing, we should not lose the creativity that comes from collegiality.

Baroness Verma: My Lords, we on these Benches welcome the Universities UK report into the impact of higher education institutions on the UK economy and the Leitch review. We recognise the enormous contribution made by the higher education sector and the need for it to remain healthy for the growth of wealth and development of the UK's skills base and economy.
	As the noble Baroness, Lady Warwick, pointed out, the higher education sector not only generates revenue greater than UK pharmaceutical companies but directly employs more than 330,000 people, which equates to 1.25 per cent of total UK employment. In addition, 276,000 people in other sectors are also dependent on the higher education industry. The sector directly spent £15.4 billion on goods and services produced in the UK and, through direct, secondary or multiplier effects, it generates£42.5 billion in the output of the economy.
	Future learners believe that by going to university they will increase their potential to earn, to get better life skills and to enjoy better health. They therefore must not be deterred from committing to further education because of fears of rising debts through tuition fees and the general rising cost of living. The 2001 census shows that UK birth rates are falling: 600,000 fewer young people will enter the workforce between 2010 and 2020. At the same time, the Chancellor's targets for economic growth need another 1.3 million people to join the workforce. An additional 1.9 million people are needed to secure economic growth and to provide industry with resources to remain competitive.
	The Government must bear in mind that declining numbers of young people in the UK will result in a natural decline in numbers applying to UK universities and, therefore, an increasing need to attract overseas students. Are there any plans to increase university marketing in countries such as China and Hong Kong, where recent figures show a decline? If we are to compete effectively with developing giants such as India and China, we cannot allow qualifications, especially in vocational subjects, to decline, as has happened with third-level qualifications, with the number achieving them dropping from 42,000 in 1999-2000 to 28,000 last year.
	We must also be concerned about the number of adults who are functionally illiterate. Approximately5 million adults are currently functionally illiterate, while 17 million people struggle with numeracy skills. The Leitch review of skills revealed that over one third of adults in the UK do not have basic school leaving qualifications. While we all recognise the huge importance placed on an educated and skilled workforce, we cannot ignore the 7.9 million people,13 per cent of the UK population of working age, who remain economically inactive. It is vital that the Government and higher education institutions reach out to this last group of people who may consider education as something you leave at school and cannot access afterwards. To reach this disengaged group, a culture of continuous learning must be available, one that offers much more flexibility and support in the different activities in higher education.
	The higher education sector works closely with business and industry, and is of course the key to improving the nation's skills and productivity. As my noble friend Lady Rawlings highlighted, the contribution made by higher education institutions to the economy is substantial. In particular they are often the drivers of regional economies. Universities are now contributing increasingly to a knowledge-driven economy that relies on innovation and productivity growth. The noble Lord, Lord Bhattacharyya, was absolutely right to say that universities need to be freed from excessive bureaucracy, while my noble friend Lord Geddes highlighted the need to recognise the value of specialist institutions and how they add to our culture economy, in which we are world leaders in many areas.
	Let me take as an example of developing and retaining skilled individuals in the region the work of the University of York. York produces approximately 2,000 first-degree students and 1,000 postgraduates each year. The university is proactive in promoting local and regional employment for all graduates. It is also proactive in collaborative projects with businesses, while the activities of the science park yield substantial revenues for the region. However, can the Minister tell the House how he intends to address the shortage of science facilities in UK universities, and the question of access to separate science qualifications for school pupils? A large body of evidence indicates that chemistry and physics graduates will, on average, earn over 30 per cent more during their working lifetime than A-level holders of those subjects.
	I have some concern that to ensure that participation in higher education continues to grow, the Government need to assist the process rather than hinder it. I shall explain what I mean. There is little evidence to suggest that when parents are asked to provide information on whether they have been to university, it increases graduate participation. We already have increased participation and we do not need to meddle in parents' backgrounds. The National Union of Students is absolutely right to highlight the continued effort by universities to ensure greater participation by the black and minority-ethnic communities, those in the lower socio-economic groups and people with disabilities. We should be careful not to deter those for whom university would be a natural life choice by erecting artificial barriers against them. I look to the noble Lord for reassurance that measures to discriminate against the children of better-off families will not be pursued in this way.
	I agree with my noble friends Lord Norton of Louth and Lady Bottomley of Nettlestone that the higher education sector, through the diversity of its students, adds economically, socially and culturally to our towns and cities. The research and development carried out in our universities has had groundbreaking results, thus greatly contributing to the wealth of our intellectual capital and economic growth. The Government must give assurances that our top universities will not face difficulties in attracting appropriate levels of funding to ensure a continuing stream of quality work using well funded resources for research and training. As my noble friend Lord Norton of Louth observed, the Government need a lighter touch.
	I congratulate the noble Baroness, Lady Warwick of Undercliffe, on securing this important debate. I must declare that I have no interests to declare with any university.

Lord Adonis: My Lords, I join the noble Baroness, Lady Verma, in congratulating my noble friend Lady Warwick on initiating this debate and on her excellent speech. My noble friend deserves a great deal of personal credit for the strength of our universities today, in her longstanding role as chief executive of Universities UK. The recent UUK report on the economic impact of the UK's higher education institutions is a typically thorough and incisive piece of work. I have a slight quibble with the noble Baroness, Lady Sharp: I have never known Universities UK undersell its product. If it is indeed underestimating the economic impact of universities, I leave the two noble Baronesses to discuss that between them.
	With the exception of the noble Baroness, Lady Verma, I have never heard so many interests declared in one debate in your Lordships' House. Today's debate has demonstrated yet again the breadth and depth of university expertise in the House. Going through the list of speakers, I tried counting the number of serving or former university chancellors, principals, vice-chancellors, heads of colleges and professors, but I soon gave up, because the number of your Lordships represented in more than one of those categories—some in very many of them—was so complicated that it was becoming a major piece of prosopographical analysis more fit for a doctoral thesis than a speech.
	The economic benefits that universities bring to their societies have long been recognised. I have not gone back to Confucius, but as long ago as 1442 the citizens of Ferrara petitioned their Duke to found a university because,
	"Strangers will flock here from distant lands and many scholars will stay here, living upon our bread and wine and purchasing from us clothing and other necessities of life. They will leave their money in the city and not depart without great gain to us all".
	The Renaissance Italians clearly understood the importance of overseas student fees, but I suspect that even the worldly wise Machiavelli and the Medici would have been astonished that there could in the future, in a fairly small country, be 300,000 overseas students, worth a staggering £1.5 billion a year to the economy in off-campus spending alone—not all of it, I believe, spent on wine and "other necessities of life" for the modern students; I am sure a good part of it also goes on books.
	London has a particular attraction for overseas students. The LSE—once known as "Let's See Europe"—is about as international an institution as it is possible to be, as my noble friend Lord Giddens testified. The most multifaceted strengths of London's universities were all well attested to today by my noble friends Lord Paul and Lady Blackstone, the noble Lord, Lord Sutherland, and the noble Baronesses, Lady Rawlings and Lady Valentine. However, I hasten immediately to add that the rival and complementary attractions of Warwick, Oxford, Gloucestershire, Cambridge, Bournemouth, Staffordshire, Aberdeen, Liverpool and Hull have been equally well represented in the House this afternoon—as well, I should add, as the specialist arts and music institutions so rightly praised by the noble Lords, Lord Geddes and Lord Sutherland.
	It is important at the outset to emphasise that the economic role played by universities represents only one of the many ways in which they contribute to society. I would not for a moment want to undervalue their powerful role as forces for social, cultural and intellectual advancement. As my noble friend Lord Bragg and the noble Baroness, Lady Deech, so rightly said, universities are, above all, a force for civilisation in our society. That, too, has long been appreciated. John Henry Newman wrote in 1854:
	"If ... a practical end must be assigned to a University course, I say it is that of training good members of society. Its art is the art of social life, and its end is fitness for the world".
	Newman's words remain as true today as when he set them out as the Idea of a University.
	Today's debate is specifically about universities' economic impact, and on that front, as the UUK report implies, our universities are in fact, if anything, too prone to hiding their light under a bushel. At the risk of reinforcing national stereotypes, I note that the US institutions are rather more forthcoming and unabashed. The front page of the UCLA website will tell you that every dollar the university receives from the Californian taxpayer generates $9 of economic activity within the state. The University of Oregon claims no less than $20 of impact for every dollarof public funding invested. Many of our universities could and perhaps should declare something equally impressive on their websites.
	It follows that UK taxpayers, most of whom have not, as the noble Baroness, Lady Verma, so rightly said, benefited from a university education, can be reassured that their very substantial investment in higher education produces a financial return in addition to the wider social return, which is to their good and that of the country as a whole.
	As we have heard today, the economic impact of the universities is a powerful argument for greater public funding. This is an argument to which the Government have been consistently receptive over the past decade, and will, I assure my noble friend, continue to be receptive in the coming Comprehensive Spending Review. I pay tribute in this respect not least to my noble friend Lady Blackstone for her ministerial stewardship of the universities during four years in which their financial health was substantially restored.
	We have gone further since then, not only with additional large increases in state funding, both in research and teaching, but in the wider reforms we have carried through—at some political cost—on student finance and, most recently, university endowments. During the last general election, I said at one political meeting that I expected to have the words "tuition fees" engraved on my tombstone; whereupon, someone shouted from the back: "Not soon enough!" At least let me share the blame for that particular reform with the noble Lord, Lord Dearing, who set the ball rolling precisely 10 years ago, and say to the noble Lords, Lord Hannay and Lord Butler, that the Government are committed to an independent review after 2009. I stress "independent review" to the noble Lord, Lord Hannay, not least because we want to take this vital issue of the future funding of our universities out of the political hurly-burly to the maximum extent possible for the good of the country.
	We have demonstrated our commitment to supporting universities again and again. It has been shown in the growth to record levels of the numbers of students that our universities admit, and the fact that 43 per cent of all 18 to 30 year-olds now receive a higher education, with big increases in previously under-represented groups brought about not least by the newer universities so rightly emphasised by the noble Baroness, Lady Cox, and the noble and right reverend Lord, Lord Carey. It has also been reflected in the fact that this increase has been achieved without any real-terms reduction in the per capita public funding of university teaching after 25 years in which there have been substantial year-on-yearper capita reductions and it has been shown in government funding of university research, which has more than doubled since 1997.
	Scientific research has been the greatest beneficiary, thanks in no small part to the work until recently of my noble friend Lord Sainsbury of Turville as science Minister. I thank the noble Lord, Lord Butler of Brockwell, for his remarks on the way that we have stood by biomedical researchers, including at the University of Oxford. I assure him and the House that we will continue to do so.
	Of special relevance to this debate, the Government have demonstrated their commitment by creating the Higher Education Innovation Fund, which is currently providing universities with more than £100 million a year to help them engage with businesses and communities. That fund will continue beyond the current third year of funding. My right honourable friend the Chancellor announced in the Budget recently that the public funding of universities will continue to grow in real terms over the period of the Comprehensive Spending Review. This will enable us to honour the commitments on the unit of funding and student support made during the passage of the Higher Education Act 2004. It will also allow us to continue widening participation and increasing employer engagement.
	With his customary panache, Boris Johnson said recently in his role as Opposition spokesman on higher education:
	"If Universities UK says our universities contribute£45 billion to the economy, I am not going to quibble."
	I will not quibble either. Nevertheless, universities engage with the economy in a wide variety of ways, many of which we have heard described today. Some of these are easier to quantify than others.
	The best source of information on what can be quantified is the latest Higher Education — Business and Community Interaction Survey, which gives an insight into the extent of universities' external activities. It shows, for example, well over 1,000 licences a year being granted for non-software products and over 900 spin-out companies operating with at least one university as a partner. No less importantly, the survey shows more than 10,000 full-time equivalent staff days a year being devoted to free public lectures that were attended by some 400,000 people, and a further 1,000 staff days being spent on paying events for the public.
	The greatest impact of universities' external engagement is most often felt in their local communities which are, as my noble friend Lady Blackstone rightly said, frequently in areas of the country that are in need of economic development. To take just one example, the University of Hull, represented so effectively here today by the noble Lord, Lord Norton, and the noble Baroness, Lady Bottomley, was only last month awarded £4 million to develop the Yorkshire and Humber lifelong learning network. Nowhere in the country needs such investment more than Humberside—and every part of the country can boast of similar schemes in progress, often with universities in the lead in taking them forward. Often these universities are actingin highly innovative partnerships in so doing. At Medway, for example, as my noble friend mentioned, I have been extremely impressed by the collaboration between the University of Greenwich and the University of Kent at Canterbury in creating a completely new campus focusing on widening participation and with a substantial regeneration effect.
	All these activities, and others that the survey describes, might be summed up in the phrase "making knowledge work", which is one of the marketing slogans used by the University of Bradford, a prominent participant in knowledge transfer work as my noble friend Lady Lockwood described in her excellent speech. She also described the changes in higher education in recent years as a whole as "close to a revolution"—I think that those were her words. I would concur with that view.
	Of course, universities' economic impact extends beyond their direct business and community engagement activities. It also extends beyond these shores. It can be found, for example, in future use that students will make of the hard and soft skills that universities teach them, not least the language skills that students may acquire as part of their courses, or through extra-curricular activities, and about which the noble Lord, Lord Dearing, spoke so eloquently. I take this opportunity to thank him, and Dr Lid King, for their work in producing the recent report on languages, which has some important recommendations for universities, which my department is looking to take forward.
	We talk a lot about the internationalisation of economies and of higher education, but perhaps without always appreciating how closely the two are linked. This is an important issue, and one to which I will devote the remainder of my remarks.
	Our universities today are key actors in not only the domestic economy but also European and global economies to which our own prosperity is increasingly tightly bound. Of the £3 billion or so per year of private funding that universities receive for research contracts and other services, over £0.5 billion comes from sources outside the UK, and of the £4 billion in fee income they receive, about one-third comes from international students. The UK's leading universities have recognised that, if they are to fulfil their role of ensuring that all learners are prepared for life in a global society and work in a global economy, they need to engage with other countries.
	The name Bologna, whose university was founded in 1088, is rightly associated with this intent. The Bologna process aims to enhance the competitiveness of European higher education worldwide through greater compatibility and comparability of European higher education systems and greater transparency and recognition of degrees. This brings real benefits in opening up opportunities for student mobility; study abroad enables young people to develop the skills, knowledge and confidence to seize the opportunities available in today's labour market, while inward mobility brings real economic benefits for the UK. This message will be strongly underlined when my right honourable friend the Secretary of State hosts a major conference of Ministers from the 45 Bologna countries in London next month. The Royal Society noted in February:
	"The Bologna Process has the potential to act as a driver for change... in UK higher education: the process provides an opportunity for the UK to consider more broadly whether our current system is delivering what students, employers, the economy and wider society need from its graduates".
	Bologna can indeed act as a spur to universities throughout Europe to make the changes necessary to remain competitive. All institutions need to identify their areas of excellence, improve their governance, develop new partnerships with employers and increase and diversify their funding sources. We can be proud that the United Kingdom is at the forefront of higher education reform in Europe in all the respects I have just mentioned. However, this further reform is necessary so that institutions can deliver excellent provision—helping graduates develop the essential knowledge, attitude and skills to compete in fast moving global markets.
	The impact of UK universities is also felt beyond Europe. Not only is the UK the second most popular destination in the world for international students after the USA, but our universities' reach extends far and wide, thanks to the partnerships they have developed abroad, and through the diverse ways in which UK qualifications are now delivered across the globe.
	International students not only bring immediate financial benefits to the UK, they add to the cultural richness of our society and in particular to our national research capacity. Some stay on to work after completing their studies, adding to our skills base, and it is very much in our interests to make it easier for them to do so. That is why, from next month, a new International Graduates Scheme will be created to allow international students in any discipline to work here for up to a year after graduation.
	Furthermore, international students who return home having enjoyed a positive study experience here often become lifelong friends to the UK, helping to forge trade, cultural and political links of immense value. This is not the least important of the many ways in which our country is aiding the developing world. I pick up the important point on Africa made by my noble friend Lady Blackstone. Here, too, the Government are supporting universities' own efforts to expand their reach. One example that the noble Lord, Lord Hannay, will recall from his diplomatic service is the Chevening scholarships programme, which brings to us some of the brightest students from around the world, including those from developing nations. Building on this work must be a vital concern to us as a country in the years ahead. For example, the Shared Scholarship Schemefunded jointly by my department, the Departmentfor International Development and participating universities helps bring to the UK academically able students from developing Commonwealth countries who are outside the scope of other schemes. This scheme specifically supports students who are unable to study here for financial reasons but whose area of study has the potential to bring developmental advantage to their home countries.
	A large number of other points were made. My noble friend Lady Warwick sought assurances that funds would be made available to support teaching infrastructure in universities. My department has received a capital settlement of £10.1 billion in the forthcoming Comprehensive Spending Review. This is a generous capital settlement for the department, signalling that we shall continue our unprecedented investment in the fabric of our education infrastructure. I am sure that universities will share in that.
	The noble Lord, Lord Norton, raised his perennial but none the less important theme of bearing down on bureaucracy and red tape. I gave a full account of our policies in that regard in our previous debate, which I think he accepted was a move in the right direction but considered that we could go further. I fully accept that we can go further. A number of stakeholder groups are helping to advise us in that regard. The Higher Education Regulation Review Group was established in 2004 and reappointed for a further two years in summer 2006. Its membership is made up of front-line practitioners who have considerable experience and expertise and we believe that it is making an impact.
	The noble Baroness, Lady Verma, raised important issues in respect of science education. I strongly support the tenor of her remarks about the vital importance of our schools—particularly thosewhich have traditionally offered general science qualifications leading up to GCSE—having the opportunity to specialise to a much greater degree than has been the case in the past to encourage more students to stay on and study individual sciences at A-level. As she may know, we recently announced that from next year all schools with a science specialism will offer the three individual sciences at GCSE. We are seeking to expand that more widely across the system. We are also engaging in a very substantial increase in recruitment of science graduates into schools to change the unacceptable situation we have at the moment where only one in four state secondary schools has a fully qualified physics teacher with a degree. We seek to increase dramatically the proportion of schools which have qualified science teachers in all the main areas.
	I will respond in writing to the many other points that have been made. I thank all noble Lords who have spoken, and I congratulate Universities UK on its contribution to the vital debate on the future of our universities, because nothing is more important to our future as a country.

Lord Sewel: rose to move to move, That this House takes note of the report of the European Union Select Committee on The EU Strategy on Biofuels: from field to fuel (47th Report, Session 2005—06, HL Paper 267).

Lord Sewel: My Lords, the committee presented its report, The EU Strategy on Biofuels: from field to fuel, on 20 November last. Much has happened since. Its purpose was to assess whether the EU biofuels directive was proving effective as a means of increasing the biofuels content of road transport energy. I suppose the short but accurate answer is that it has not.
	Our inquiry found that the biofuels directive failed to enable the EU to reach its 2005 target of a 2 per cent market share for biofuels. It will be necessary for additional methods to be in place to meet the higher target of 5.75 per cent of market share by 2010. In our report we recognised in particular the value ofthe UK's road transport fuels obligation, which will require fuel suppliers to ensure that, by 2010, 5 per cent by volume of their sales in the United Kingdom are from a renewable source.
	We suggested, therefore, that the Commission should amend the EU biofuels directive to require member states to use similar biofuels obligations as a tool to achieve national targets. We did not consider that, in present circumstances, biofuel obligations should be imposed at a Community level. Rather, member states should be allowed to select the percentage of the biofuel obligation on a country-by-country basis while retaining indicative targets for market share.
	The evidence that we collected demonstrated that there are substantial concerns over whether biofuel production does in fact contribute to a reduction in greenhouse gas emissions. As a response to those concerns, we concluded that we would wish to see the European Commission establish a European-wide system of carbon certification for both imported and domestically produced biofuels and feedstocks. We noted too the potential benefits to the agricultural industry of biofuel production, concluding that there is a genuine prospect of bringing into use more EU land, including set-aside, to grow energy crops while respecting biodiversity policies.
	We supported the European Commission's twin objectives of maintaining fair market access for imported biofuels while fostering a successful domestic biofuels industry. While not advocating subsidies, the introduction of economic and fiscal incentives such as the fuel duty differential and the UK's enhanced capital allowance schemes are appropriate ways to encouraging the growth of the domestic industry.
	Looking forward, we considered that the EU could add real value in the development of second-generation biofuels such as timber and straw. The European Commission could co-ordinate, finance and organise European research and development as well as facilitate good practice. In that way, the Commission could encourage the market to find and develop new technologies, including the use of by-products and potential feedstocks that are now classified as waste. It is now common ground that the real breakthrough is likely to take place with the second generation of biofuels. We considered, too, that blending limits for biofuels and conventional fuels set at EU level should be revised upwards from the current 5 per cent.
	The Government agreed with the vast majority of our report. I am not sure whether that reflects our wisdom, common sense and right thinking, or whether that was in reality a condemnation of our total lack of imagination and innovation. I shall not deal with the Government's response, because I am sure that the Minister will do that more than adequately himself. Perhaps I may make some general points.
	The subject of biofuels has been one of much public and political debate since our report was published, notably within the context of Sir Nicholas Stern's report on the economics of climate change. At the EU level, the European Commission publishedits biofuels progress report on 10 January 2007, concluding that the voluntary targets set for 2010 were unlikely to be achieved. It has proposed a significantly higher and, this time, obligatory target of 10 per cent to be achieved by 2020. In its report, the European Commission recognised the potential benefits of national biofuels obligations, the development of which was recommended in our report.
	In general, many of the solutions suggested by the Commission are in line with the committee's report. It recognises that blending limits must be revised, that second-generation biofuels must be developed, that measures must be taken to guarantee the environmental credentials of biofuels and that a balanced approach must be taken to international trade in order that both exporting countries and domestic producers can invest with confidence. The European Council of 8 to 9 March this year endorsed a 10 per cent binding minimum target to be achieved by all member states for the share in biofuels in overall EU transport petrol and diesel consumption by 2020, to be introduced in a cost-efficient way.
	The recent Budget contained a package of measures to enhance the supply and use of biofuels; for example, the fuel duty differential was maintained at 20 pence per litre until 2009-10 and an enhanced capital allowance scheme was introduced to ensure that profit-making and loss-making firms had an incentive to invest in the cleanest biofuels plant. So it is an area of policy that is developing very quickly, both at the national level and at the level of the European Union.
	The majority of points made in our report have since been supported by the Commission and the European Council. The importance of ensuring lifecycle sustainability of biofuel production is now towards the top of the biofuels agenda; it is recognised as a key issue. Second-generation biofuels are widely seen as the critical way forward. We regret, however, that the European Council adopted a mandatory 10 per cent target. We would prefer tosee national biofuels obligations used across the European Union as a tool to achieve a voluntary minimum target.
	The Commission identified three objectives that the directive, through the increased use of biofuels, would help to meet: the reduction of CO2 emissions, an increase in energy security, and providing an additional opportunity for income for farmers. The problem is that these three objectives do not necessarily sit happily together. The UK is one of the few member states to have given emphasis to carbon reduction. Others appear to have been more concerned with energy security. There is a danger that biofuel production will be undertaken in ways that lead not only to no carbon reduction overall but to major environmental damage, particularly in the context of the rainforest.
	If our primary concern is emission reduction, it is necessary for us to be sure that investment in biofuels is the most cost-effective way of achieving reductions, not just in transport but overall. It would be enormously helpful if the Minister, either today or later, could provide us with some figures on the relative cost-effectiveness of different emission-reduction options.
	Finally, the future contribution of biofuels is not unproblematic. Professor William McKelvey, the chief executive of the Scottish Agricultural College, has recently argued that one consequence of the reduction of world poverty and the continued economic development of countries such as China and India will be an increase in the global demand for food. In those circumstances, energy crops will be in direct competition with food production. Unless there is rapid development of second-generation biofuels,it is not clear how far more traditional biofuel production can be expanded, especially in an environmentally sustainable way. It would be a cruel irony if we ended up with an industry which today is seen as something of an environmental saviour but which in time inflicted its own environmental damage. I beg to move.
	Moved, That this House takes note of the report of the European Union Select Committee on The EU Strategy on Biofuels: from field to fuel (47th Report, Session 2005—06, HL Paper 267).—(Lord Sewel.)

The Earl of Selborne: My Lords, I know that the whole House will wish to thank the noble Lord, Lord Sewel, for the very clear and helpful way in which he introduced the debate on this most important report. I congratulate the chairman of the sub-committee, my noble friend Lord Renton, and all its other members for having presented in clear terms some of the dilemmas that a European Union biofuel strategy might lead us into. As the noble Lord, Lord Sewel, reminded us, it is by no means clear that the three objectives are mutually compatible.
	I declare two interests, which pull me in different directions. The first is that I am a farmer. Clearly, all farmers welcome new income-streams, and there is enthusiasm throughout Europe for maximising income from energy crops. I also chair the trustees of the Royal Botanical Gardens, Kew. Of course, Kew, together with other botanic gardens around the world, tries to conserve rainforests, but one of the great problems that we are dealing with is the massive investment in palm-oil plantations and the loss of rainforest thereby. There is a real irony when you think that this loss of biodiversity is encouraged by people trying to demonstrate their green credentials.
	Let us look at the three objectives: opportunities for rural areas, a new market contribution to energy security, and a contribution to reducing greenhouse gas emissions. All three have to be tested carefully to see to what extent all of them are valid for setting some challenging targets at the European level.
	On benefits for rural areas, I had a lot of sympathy for the representative of the Danish Government who gave evidence to the committee. The Danes were not at all keen to set targets; they pointed out thatthey could achieve much better ways of reducing greenhouse gas emissions. After the noble Lord,Lord Rooker, gave evidence, Defra submitted supplementary evidence, which is in the second volume of the report. A question was asked about the respective costs of the different fuels. By far the most competitive source at the moment is ethanol from Brazil derived from sugarcane. It comes in at 6p to 11p per litre. If we grow it ourselves from sugar beet or wheat, it is likely to be three or four times that figure. So you need subsidies or tariff barriers, or you need to require people, under the obligation, to use it whether they want to or not. So although we are saying that it would help rural areas, it would put us back on the old treadmill—which the Danes certainly do not want, and I doubt whether the British public want it—of having subsidised European agriculture, and heavily subsidised at that.
	The second objective is energy security. Let us briefly consider Sweden, which is well ahead of the rest of Europe in importing ethanol from Brazil. Sweden does not have oil stocks, and undoubtedly it is important to derive energy from another source for energy security reasons, but such imports do not help your security very much if you simply make yourself vulnerable to another source such as Russian oil, gas or whatever. There may be a security element in that reasoning but let us be clear that such an argument is not necessarily very logical.
	I think that we will always be dependent on imports for biodiesel, for example. We can always produce more ethanol by not exporting our wheat, using our set-aside and perhaps increasing our area somewhat but there is a problem with biodiesel derived from oilseeds: you cannot grow oilseed rape as you can wheat, crop after crop on the same ground. It will always be difficult to be secure in biodiesel supply. In any case there are always competing demands for biomass crops, for use not in transport but to co-fire power stations. There is already a demand there for willow and other biomass sources such as elephant grass, miscanthus and the like. We can see very little contribution towards energy security from these new biofuel food stocks.
	Thirdly, there are the environmental benefits. The noble Lord, Lord Sewel, reminded us that the British have bought into this much more than the other member states have. It is clearly true, as the report makes clear, that biofuels can make a substantial contribution to reducing greenhouse gas emissions. But that is not invariably so, as the noble Lord, Lord Sewel, also said.
	Brazilian sugarcane, the best energy performer, yields about eight times the energy for every unit used in its production. Probably the worst example is some of the maize corn ethanol grown in the mid-west of America. It is doubtful whether that energy source yields as much energy as is required to produce it. It source also shelters behind a massive tariff barrier of 54 cents per gallon which is intended to ensure that this burgeoning industry in the mid-west is not undermined by the much more efficient sugarcane ethanol from Brazil.
	The committee wrestled with the environmental credentials of biofuels, and I agree with the report that it should be possible to have verification on a European scale. There are assurance schemes but it is much more problematic to roll them out on a global scale. We need only think of what is happening with the illegal felling of timber from the Amazon basin, northern Borneo and many other countries. We know that a large amount of the wood that we import is illegally felled. In other words , the forest stewardship schemes which have been around a long time simply have not worked. I am absolutely certain that it willbe just the same with the verification of biofuels. The concern of Kew and others that we will degrade the rainforests as we encourage higher targets for biofuels are a real worry.
	What is needed is not so much encouragementto maximise biofuel production in the part of the world where it is most efficient as carbon creditsfor conserving forests. The EU Emissions Trading Scheme for carbon credits does not include land use. It would be an enormous advantage if you could give credit to Brazil, Malaysia, Indonesia and other countries for conserving what is already there and not giving credits to industries that pollute less than they used to. I am sure that that needs careful examination.
	I agree with the noble Lord, Lord Sewel, that the future lies in the second generation. The second generation is all about using cellulose from any biodegradable source, whether it is timber, thinnings or urban waste. It does not matter what it is; provided that it is a plant and you can degrade it with enzymes to its constituent sugars, it is a source of fuel which you can use for transportation or anything. The noble Lord, Lord Rooker, was asked when giving evidence what the potential was. Although he gave rather a long time scale—I think he said it was 2050—he said that it was quite exciting and we might get up to a third of our energy resources from this source. I am not sure whether he was talking about transport or all energy sectors.
	Either way, a lot of people in the biofuels sector are wedded to the first generation and say, "No one has ever produced this commercially; it is a long way ahead". Again, one should be cautious about this. It is moving much faster. Since this report was published in February, the United States Department ofEnergy has announced awards of £385 million forsix commercial cellulosic ethanol refineries, with a completion date of 2009-11. The quantities are not enormous—it will produce only 130 million gallons, compared with the 5 billion produced from corn-based ethanol—but it is a significant breakthrough when these commercial schemes are up and running. There is already a pilot scheme in Ottawa which has been running for some time. It must be admitted that the cost is currently uneconomic. It must come down by at least half and probably by two-thirds.
	The evidence of this new technology is very promising. The future lies in turning these waste materials—timber thinnings, grass cuttings and the like; all sorts of waste—into transportation fuel. That is enormously valuable. We have the infrastructure for using biofuels because of the present first generation. We must put all our resources into planning for the second generation, not commit ourselves to land use which we might all regret for the first generation.

Lord Bradshaw: My Lords, I do not have the expertise of the noble Earl, Lord Selborne, on this subject, but the debate is timely and I congratulate the noble Lord, Lord Sewel, on achieving it.
	Demand for fuel is growing fast and will continue to do so. A 10 per cent target share for biofuel use in the transport sector by 2020, as proposed by the European Union, is demanding simply because of the rising consumption trend. Meanwhile, the search for energy economy and efficiency must continue apace. That was partly what the noble Earl, Lord Selborne, was referring to. The fact that we are looking for more fuel should not blind us to rapidly rising demand throughout the world. Biofuels are therefore not "instead of" issues but part of a multi-pronged attack on energy use. Can the Minister say whether "the transport sector" includes aviation? If so, it would make the subject even tougher than it already is.
	The Select Committee draws attention to many things and while nobody wants over-regulation or over-direction, there are several very important roles that the European Commission should play. We must remind ourselves continuously, despite the noise, that we are an integral part of the European Commission. We have Ministers and Members of the European Parliament there and we should seek to influence policy. I despair sometimes at the continual whingeing that we hear about it. The United Kingdom is not doing as well as some other states. We have to admit that and learn from those other states.
	A European-wide system of certification is necessary. The noble Earl, Lord Selborne, said that such systems do not work very well as regardstimber, but we are talking about things that are internationally tradable. We do not want to lay waste to the forests of Brazil, Indonesia or elsewhere to feed our appetite for fuel, and lifecycle environmental performance is vital for imported and domestic biofuels.
	The taxation system is a very powerful weapon in our armoury. It has to be exercised carefully to avoid transgressing the state aid rules to which the Select Committee drew attention, but it is noticeable that other countries in the EU give greater tax and other incentives without apparently offending EU rules. I sometimes wonder whether this country is oftennot the victim of EEC rules but a victim of the assiduousness with which we apply them. Those are two different things.
	Blending limits, as mentioned by the noble Lord, Lord Sewel, have to be addressed on an EU basis, because the vehicles and the fuel that they use are in common use and are freely traded and the automobile industry really only negotiates with the EU and Japan together. It certainly cannot be done on a national basis. As has been mentioned, the oil and vehicle industries must be persuaded to set higher limits for bio-ethanol and they should consider that alongside other clean technologies.
	I give those few examples—and there are others—to show Ministers and officials that they should get in there and seek to drive policy the way that they want it. They should find allies. Just as you do not win sports events from the touchline, you will not win this debate from a passive position.
	To return to targets, how does the Minister intend to implement the binding 10 per cent target for 2020 as agreed by the European Council? Often, when energy Questions are asked in this House, they are played back with a dead bat by Ministers answering from the Dispatch Box. However, we are not asking potentially embarrassing questions about nuclear power this time, but constructive, neutral questions about how we move forward to achieve a target that we assume is already part of government policy. I do not think that Ministers can play this back by referring to the Comprehensive Spending Review, for example, which we recognise is off limits; we want positive indications in the Minister's reply. That would be very welcome.
	As has already been said, we do not want to seethe self-sufficiency policy with the EEC for food abandoned, but we welcome the prospect of more land being productively and intensively used for feedstock, if that is possible. With that in prospect, it is necessary to address issues such as the transport of material to processing plants, because it is no good, for example, growing crops in Scotland if you are going to use lots of fuel getting them to the processing plants wherever those happen to be.
	We hope that the Government have plans to support these developments, particularly in developing the technology from renewable resources and upgrading what are now demonstration products to the commercial scale at which they have to operate. Those demonstration projects are best supported on an EU basis, withthe prospect of moving forward commercially on a national basis. A commitment to long-term relief on excise duty is something that the Government ought to consider. It is necessary in the long term to encourage investors, and it could be at no net cost to the Treasury. It is the differential that matters. All sorts of other environmental factors can be taken into account in designing congestion charging schemes or implementing the long-awaited lorry charging scheme, when environmental performance can be one of the factors taken into account, covering all lorries—domestically owned and foreign registered—as it does in Germany.
	Will the Minister say whether, in his opinion, the incentives for the oil industry to engage fully in the process of adopting biofuels are sufficiently strong? We know that the oil giants are very large and powerful, but they need to be committed to the process. I would like to think that the oil industry is considerably more committed than, for example, the tobacco industry may be to stopping smoking or the drinks industry to combating alcoholism. That is one of the reasons why I was slightly discouraged by the second two paragraphs of the foreword of the report, which talked about things being pursued on national basis. This is a matter of international significance and it can be effectively pursued by this country only through the efforts of the European economic union.

Lord Cameron of Dillington: My Lords, I, too, served on the sub-committee that took evidence, and I congratulate those involved in assimilating the huge amount of evidence and writing the report for us.
	At first sight, biofuels seem attractive. They seem to promote two important agendas: first, as an energy source, they seem merely to reissue the CO2 absorbed during the growing of the crop and so be carbon neutral; and, secondly, they seem to offer the EU agriculture industry—I declare an interest as a farmer—a much needed extra source of revenue after a decade of very poor returns. Of course, these two agendas need more explanation and after further investigation the picture is not quite so rosy, as the noble Lord, Lord Sewel, and the noble Earl, Lord Selborne, highlighted. First, the growing of wheat and other crops to create bioethanol in the EU is not a carbon-neutral process, nor is it beneficial interms of other greenhouse gases. Field work forthe planting, management and harvesting of crops requires considerable fossil-fuel emissions; just working the soil emits carbon dioxide into the atmosphere, and the application of fertiliser means that nitrous oxide also escapes into the atmosphere. That is the downside of most crop production inthe EU.
	Meanwhile, in Brazil they are proposing to utilise their vast areas of natural forest and savannah to triple their already huge production of sugar cane for fuel. I cannot see how that process can help global warming. I have witnessed the reclamation of land in the Mato Grosso via a slash-and-burn policy, and the short-term effect of that can only contribute to global warming. Although I admit that, as the noble Earl, Lord Selborne, said, sugar cane is one of the best plants in the world for converting solar power into energy usable by mankind, knocking down forests in South America, Africa and Indonesia to grow feed stocks for biofuels from palm oil and sugar cane and then shipping it several thousand miles to Europe does not seem to be environmentally attractive. The idea that Brazil can get carbon credits for doing that seems absurd.
	What struck me, like the noble Earl, Lord Selborne, about the evidence we took from Europe is that the biofuel debate did not seem to be driven by global warming arguments, but only by the desire to be free from fuel dependency on Russia in the case of Europe, or other oil and gas-producing countries in the case of the United States. Only Denmark seemed to bring an environmental focus to bear on the biofuel debate, and insisted that there were better ways of extracting energy from biomass which were more environmentally friendly. It is interesting to note from a recent report that it has done a complete U-turn on this and proposes to invest a lot of money to harness new developments in the field.
	Having said all that, I very much support our report's conclusions that whatever the shortcomings of current EU bioethanol and biodiesel production, it is right that the Government should do all they can to promote this embryonic industry through use of the RTFO, the renewable transport fuel obligation. I add that we emphasise—a matter that has been stated before—that the EU should do all it can to encourage a system of environmental audit or certification of the biofuel production, both at home and abroad. I agree with the noble Earl, Lord Selborne, that I am not sure how it might achieve that.
	I have two important reasons for supporting the industry at this time. First, transport generally is a growing source of greenhouse gases, and biofuel is one of the few ways attracting investment which could improve the sector's performances. As I have pointed out, it is not ideal. I think that that reason would not be good enough to support an industry which perhaps could do more harm than good, vis-à-vis climate change.
	However, the second and main reason for my support of these first-generation biofuels is that second-generation biofuels are almost upon us, asthe noble Earl, Lord Selborne, stated. The second-generation process allows the conversion of lignocellulose material—woody material—into fuels; actually, into almost everything, from chemicals to perfumes to medicines and so on. The difficulty is that each woody material—whether it is wheat straw, maize stalks, miscanthus or wood from trees, thinnings and so on—requires a different enzyme to break it down. Once that hurdle has been overcome—the noble Earl, Lord Selborne, reported that there is good reason for optimism—we are into a wholenew ball game, where many of the disbenefits of first-generation biofuels evaporate.
	For a start, we will be able to use perennial crops, such as miscanthus, willow and so on, which cuts out soil disturbance and virtually all fuel and fertilizer use in growing the crop. Secondly, it means that there ceases to be any real competition between fuel and food in terms of land use. For example, with wheat, you would merely use the grain for food and the straw for fuel. The same applies to maize. In other words, we as farmers would start to use the whole crop for commercial return.
	Thus, I end where I started. Whereas the current generation of biofuels would only seem to be helpful to climate change, but in reality have some serious shortcomings, I believe that second-generation biofuels will be hugely beneficial, both to climate change and to UK agriculture. Therefore, I strongly support our recommendations that this industry is very worthy of government support. But, above all—I end by making this strong recommendation—we must not at this stage do anything to underminethe research and development of second-generation biofuels. That, with the dramatic cuts Defra is making to its R&D budget, is exactly what the Government are doing.

Lord MacGregor of Pulham Market: My Lords, I begin by declaring an interest. I am a non-executive director of Associated British Foods, which owns British Sugar. I have declared that interest in these debates before. I, too, would like to congratulate my noble friend Lord Renton of Mount Harry and his colleagues on what I regard as an outstanding report, which has already had a significant impact. It is succinct. It covers all the main points well, and Iagree with all its recommendations. Therefore, I shall concentrate on only four issues.
	From the way in which my noble friend Lord Selborne and the noble Lord, Lord Cameron, were developing earlier parts of their argument, I wondered at one point how they signed up to the final recommendations in the report. It is possible to reconcile that, and indeed the three objectives, provided that some of the warnings they gave are taken into account. I also make the point that the second generation of biofuels will not be fully developed unless we make a start on the first generation and ensure that we are serious about developing them.
	On the first issue, I agree with all three objectives at the beginning of the report and do not think that they are unnecessarily incompatible. As others have said, the strengthening of energy security is increasingly rising up the agenda in the EU, compared with climate change, which dominated earlier debates. That is no doubt due in part to recent events, to which the noble Lord, Lord Cameron, referred. Of course, we must not exaggerate the impact of biofuels on energy security. I agree with my noble friend Lord Selborne that they are only a partial, perhaps small answer, but they can make a worthwhile contribution to both diversity of supply and home-grown fuel, and it would be folly not to develop them.
	The environmental benefits are important to capture but, as others have said, it is necessary to ensure that there is a plus, taking account of issues such as deforestation, energy use in producing such fuel and transport costs. Here, I very much agree with the report and with what the noble Lord, Lord Sewel, said, about finding and applying a method—difficult but workable, as I think that the evidence to the committee made clear that it will be—of carbon accounting, getting a system to monitor, evaluate and certify the overall environmental performance of both important and domestically produced biofuels. I want to return to that later.
	Of course, there is the domestic agricultural impact. I am surrounded in this debate by agricultural experts, but I live in Norfolk and still keep closely in touch with my agricultural community. We all know what a very difficult period farmers have gone through during the past 10 years as income has declined and with the low output prices. This could provide another important income source very quickly, paying farmers for something that has an economic use and value, which set-aside does not.
	My second point concerns the role of the British Government. The report brings out clearly the impact of incentives in developing biofuel demand and supply. It is no coincidence that the member states with the greatest incentives, Germany, Sweden and Spain, were the ones to develop the market. The UK Government were slow to react. The 20p per litre fuel duty reduction was sufficient to incentivise the industry. The renewable transport fuels obligation came through rather slowly. I pay tribute to the noble Lord, Lord Palmer, and the late and much missed Lord Carter—I played some part myself—on the Energy Bill in 2004, I think it was. We tabled an amendment and the noble Lord, Lord Whitty, to his great credit took it on board and provided the legislative wherewithal to get the RTFO to proceed.
	I suspect that capital allowances will not have much more than a marginal impact compared with the RTFO. Hence, as the report shows, we have been behind others in developing biofuel prospects. Our sales of biofuel to date have been below target and we are hardly giving a lead up to 2010. By setting our targets by volume, not by energy, as does the directive, our 2005 target was only 0.2 per cent and our target for 2010, measured by energy, is 3.5 per cent, compared with the indicative target in the directive of 5.75 per cent measured by energy.
	We need to be more ambitious. Above all, the Government need to indicate to industry that they will be robust in insisting on the targets; that the targets will be in place for the long term; and that the incentives will be maintained for a reasonable period. British Sugar has been developing and will openthis June the first bioethanol plant in the United Kingdom, at a cost of £25 million. It will produce 55,000 tonnes of bioethanol each year using 700,000 tonnes of sugar beet. It went ahead only when the Government made clear that they were going ahead with the RTFO. That, and especially the development of second-generation biofuels, will involve industry in considerable capital and R&D investment. The point was well made in paragraph 116 of the report:
	"The importance of reassuring the market about public policy towards biofuels should not be underestimated".
	Earlier, the report refers to the economically marginal element of biofuel production in the EU, which will require a continued substantial amount of support, and then moves to an analysis of what it calls the great tax giveaway—with a question mark, which I emphasise. I agree with those who say that the mandatory obligation weapon in the policy is by far the most significant and it is that that has driven people to move. However, at present, to give the industry the long-term assurance that it needs properly to develop the market and meet the targets, tax incentives need to continue as part of the package, although I can see that, in the longer term, they can be phased down or out.
	I have two more points to make on signals and incentives from the Government. When the RTFO comes in in 2008, it is important that the buy-out price is set as high as possible. The Government must also indicate as soon as possible how they intend to implement the binding 10 per cent target for 2020, as agreed by the European Council. If they did so, this would boost investor confidence in the UK biofuels industry and put it on to a more solid basis. Without this element of longer-term market certainty, investment, particularly into second-generation biofuels in the UK, cannot be assured.
	I said that I would develop the point about carbon measuring a little further. Some have demanded that the Government introduce minimum carbon-savings thresholds and sustainability standards to qualify for certificates under the RTFO from the start of the scheme. They argue that mandatory reporting alone is insufficient to prevent environmental disasters such as deforestation. British Sugar believes, and I agree, that the direct linkage of the kind proposed by those who are arguing for this should be introduced as soon as—this is the qualification—there is a consistent set of robust and reliable data based on globally accepted science. Current accounting systems are developmental, at best, and are not fully understood by global biofuel supply chains. Moreover, the establishment of minimum sustainability criteria must be acceptable, within WTO trade rules, and there must be minimum standardsfor carbon and sustainability reporting, agreed and implemented at EU level. The Government have been right to take the lead in the EU by insisting on mandatory reporting on carbon and sustainability standards, but I encourage them to continue their stance, as announced in the energy review, to develop robust standards before moving to linking support to minimum standards.
	Finally, there will be many questions of balance, as noble Lords have already made clear in the debate. There is, for example, the balance between food production and fuel production, to which the noble Lord, Lord Sewel, referred. Driven by growing ethanol demand, as we know, and recent signals from the US President and Government, US farmers intend to plant 15 per cent more corn acres in 2007. We have already seen an impact on the price of wheat, and there could be implications for food commodities and a consequent impact on food prices. We live in a global world, and that balance and those possible unintended consequences need to be watched. Some people are already expressing fears about the implications for UK food production, but I believe there is sufficient feedstock and land availability in the UK to enable bioethanol to contribute to meeting the targets of 5 and 10 per cent. We have a current annual exportable wheat surplus of 3 million to4 million tonnes, and 500,000 hectares of set-aside that will, I hope, be available after 2008. The industry will no doubt develop new technology to improvethe yields of existing feedstock, and develop new feedstock and conversion techniques.
	I note that Clare Wenner was quoted in the report as saying:
	"We do not have the land ... to go on fuelling this for ever".
	That is a sensible warning for the long term, but it is not an issue for the next 10 years. As this excellent report makes clear, the opportunities should be grasped now.

Lord Palmer: My Lords, my interests are listed in the report on page 46. I, too, would like to put on record how sad it is that we published it on20 November, and that it has taken five months to find a slot in which to debate it, when the biofuel movement is changing literally daily. I also pay tribute to the noble Lord, Lord Renton, for chairing the committee that produced this important report, and thank our specialist adviser, Peter Clery, who was making the case for biofuels when Whitehall thought that the topic was just a joke and that fossil-based LPG was the CO2-saving fuel of the future. He was one of the first to stress the energy-saving potential of biofuels.
	We are debating a report of EU provenance, and noble Lords might wish to note that biofuels were favoured by the European Commission primarily as an alternative energy source, not as a C02-saving policy. The first official announcement of the UK Renewable Transport Fuel Obligation was announced in this House in November 2005. This followed the introduction of the 20p per litre fuel duty rebates for biofuels. Here, I, too, would like to pay tribute to my friend the late Lord Carter who played such a crucial part in persuading the noble Lord, Lord Whitty, who was then a Defra Minister, to accept the principle of an RTFO. I well remember the excitement when the noble Lord originally accepted the amendment to the Energy Act put forward by the British Association for Biofuels and Oils, of which I was then president, and, in particular, the speech of the noble Lord, Lord Ezra, when he thanked the Minister for accepting our amendment. It literally brought tears to my eyes and I am sure that the noble Lord, Lord MacGregor, will remember that occasion.
	As other noble Lords have mentioned, the present UK proposal is for a 2.5 per cent biofuel obligation in 2008, rising to 5 per cent by volume by the end of 2010. The EU target is 5.75 per cent by energy by 2010. I make no apology for the complication of all these many figures that we will have to quote throughout this debate. The oil companies have predicted that meeting the EU target will require vast amounts of imports from countries such as Brazil, which has been mentioned by other noble Lords. "We will be swapping oil from Saudi Arabia for biofuels from Brazil and Malaysia. Does that help energy security?", asked Peter Tjan of the European Petroleum Industry Association only last month.
	European biodiesel production increased some33 per cent to more than 4 million tonnes in 2006 from just over 3 million tonnes in 2005. Germanywas by far the largest producer. EU fuel ethanol production rose by 71 per cent to 1.5 million litres in 2006 from 913 million in 2005, with Germany and Spain by far the largest producers. Production of biofuels in the United Kingdom in 2006 was approximately 260,000 tonnes—0.53 per cent of total road fuels. That is more than double the 2005 figure, but it is still way below the EU targets. Of this total, 167,000 tonnes was biodiesel, 0.7 per cent of diesel sales, and 93,000 tonnes of bioethanol, which equates to 0.4 per cent of petrol sales, all of which was imported. Virtually all UK bioethanol production went to the high value drinks industry and not, sadly, into road transport fuel.
	Our own biodiesel industry relies mostly on imported feedstocks, apart from the successful Argent plant in Scotland, which uses mainly recycled cooking oil and tallows. The Biofuels Corporation plant on Teesside, in which I declare a tiny interest as a very small shareholder, is battling with increased palm oil prices and a crude oil price rather below the $70 barrel mark.
	The UK, unfortunately, continues to lag behind other EU member states in domestic biofuel production and in the proportion of biofuels in the national mix. France, a leading biofuel producer, achieved 1.75 per cent of biofuel incorporation last year and anticipates 7 per cent by the end of 2010. The UK has only a very small but growing biofuels industry, which is to a large extent dependant on imports—chiefly palm and soya oil. No significant amounts of UK oilseed rape are thought to be involved in UK biodiesel production.
	The increased world demand for biofuel feedstocks highlights an important matter which I wish to bring to your Lordships' attention. The competition for land between food and fuel is a new phenomenon, which will be of increasing significance. This conflict has already surfaced in the United States where demand for corn for ethanol as a road fuel has driven prices substantially higher, much to the concern of food manufacturers and of course, as a result, their consumer customers. The world price of palm oil has gone up in a year from around $440 per tonne ex-Rotterdam to over $600 per tonne.
	In the real world, as the price of fossil fuelsrises, the prices of all agricultural commodities are underpinned, as will be the value of land on which these crops are grown. It is a shortage of land and fresh water which could limit economic development if crude oil stays much above the $70 to $80 a barrel mark, although major developments in geothermal energy could improve the picture substantially. This brings me to the crucial point which I wish to make. Compared with many other countries in the EU and indeed outside it, the United Kingdom is relatively short of land in relation to our population. More than in most developed countries, land is a scarce resource. We shall need it increasingly in the future for both food and fuel. Decreasing supplies of fossil fuels, global warming and rising sea levels are the reality that we have to face today, the causes of which will be the subject of debate as more evidence comes forward that man-made CO2 is not the only cause of climate change.
	But what is indisputable is that we shall need all the land we can get for both food and fuel security, and this is why the EU obligatory 10 per cent set aside is such a scandal, as indeed the noble Lord, Lord MacGregor, mentioned. Only yesterday there was a headline in most of the newspapers, including the Daily Telegraph, as well as a slot on Radio 4, from which I quote:
	"Growing demand for biofuels 'could lead to food shortages'".
	That is according to the leading government adviser, also mentioned by the noble Lord, Lord Sewel, Professor Bill McKelvey, the chief executive of the Scottish Agricultural College in Edinburgh—here I must declare a further interest as a former student. The thought that we will always be able to obtain affordable supplies of food, biofuel and fossil fuels is imprudent. It is short-sighted and it is comforting to know that the anxiety is shared by people of such eminence and expertise as Professor McKelvey, even though sadly it may not be shared by Her Majesty's current Secretary of State for Environment, Food and Rural Affairs. I urge Her Majesty's Government to take this on board.
	In answer to a Parliamentary Question I recently put to the Government, PQ 2107, the Ministerof State, the noble Lord, Lord Rooker, was, to my amazement, still talking about making space for water, which is Defra shorthand for the organised flooding of our land. May I ask that Her Majesty's Government abandon their present policy of allowing good farmland to be inundated by rising sea levels and substitute it with a policy of strengtheningour flood defences against the rising water levels associated with global warming, thus not just maintaining but increasing the land available for food and fuel production?
	Climate change is with us. It always has been and it always will be. The world is getting warmer, though there is legitimate reason to ask how much is due to natural solar activity and how much to man-made carbon dioxide. Is an increase of 10 per cent in CO2 levels from 300 parts per million to 330 ppm really the only cause of current warming? What is certain is that while we cannot predict the future, we can and should plan for possible alternatives; hence the importance of biofuels, whether they be first or second generation.
	Professor Martin Parry, co-chairman of the Intergovernmental Panel on Climate Change, reported in the Daily Telegraph of 7 April that actions to adapt to climate change such as improved sea defences and new forms of agriculture should take priority over our efforts to reduce greenhouse gases which would take years to have any effect. Global warming for the world could mean cooling for the UK if the warming effects of the Gulf Stream slow,as indeed has happened before in times of global warming, which would give us a climate akin to that of the Hudson Bay. We simply do not know.
	Biofuels have a legitimate role to play as alternatives to declining fossil fuels and, in the long term, to reducing atmospheric pollution and CO2 levels. In the context of this debate on the European strategy on biofuels, I ask that the United Kingdom takes a lead on developing a coherent EU policy. This House led the way in establishing the principle of a RTFO, now widely accepted within the European Union. We must do the same for land policies for our future food and indeed fuel needs.
	I also ask that Her Majesty's Government decide which department or Minister has overall responsibility for these matters. I know the noble Lord, Lord Ezra, feels very strongly about this, as he raised it at Question Time the other day. The last time I had a Question on biofuels, there was serious uncertainty about whether the Treasury, Defra, the DTI or the Department for Transport were responsible for the Answer. We need a dedicated department with overall responsibilities for these issues, as they will increasingly involve the adjustments to the UK economy, particularly our agriculture, to what could be very rapid changes to our climate. We must be prepared to adapt to what is almost certainly an unstoppable period of global warming allied to a declining supply to what has been our staple form of energy, fossil oil. That is the challenge.
	Liquid biofuels have their part to play, along with other forms of sustainable energy, improved sea defences and worldwide changes to agriculture and marine husbandry. I hope the United Kingdom will lead on these important issues. We must not getleft behind. I hope the Minister will give us that reassurance today.

Lord Renton of Mount Harry: My Lords, it is a great pleasure to follow the noble Lord, Lord Palmer, in this debate. He was an early prophet of biofuels, and it was the fact that we were about to look into biofuels that made him eager to rejoin the EU sub-committee of which I had the pleasure of being chairman for a few years. I was also delighted that the noble Lord, Lord Sewel, who opened the debate today, was willing to succeed me as chairman of that sub-committee.
	One of our problems during our inquiry was to remind ourselves all the time that we were an EU scrutiny committee. There was an obvious tendency to think about what we were doing in the UK, our problems and how we were tackling biofuels in the UK, but not enough about the EU. I shall come to that in the second half of my remarks.
	It was a pleasure to be on the committee with so many people with agricultural experience; not only the noble Lord, Lord Palmer, but the noble Lord, Lord Cameron, who has already spoken, and my noble friend Lord Plumb, who is going to speak. The previous chairman of the committee was my noble friend Lord Selborne, who has also spoken already and has a great deal of agricultural knowledge. We brought a good deal of expertise to our subject, but the noble Lord, Lord Sewel, is right to say that our timing was interesting, at least. When we started looking at the whole question of biofuels and we had this rather gentle subtitle, "From Field to Fuel", it was a relatively quiet matter; it was relatively shallow and calm. As others have said today, the six months since we produced our report have seen an almost hectic increase of interest in this matter, fired by the increasing certainty of scientists that climate change is a real danger and that one important way of dealing with it in the future will be to find alternative methods of producing energy that either are not dependent on coal or oil at all or have a very low carbon consequence. My noble friend Lord MacGregor said that this has taken us into some unforeseen consequences already; they were not seen when we wrote our report. This centres on the fact that, even at this stage, people look at other sources of biofuels and energy—sugar cane, palm oil, maize corn, rape seed oil and wheat—and consider how those can be used as quickly as possible.
	One rather delightful result of that that I was told about the other day is that cars in Indianapolis, the home of motor racing in the United States, all have to run on ethanol rather than petrol. That means that the atmosphere is now a nice smell of corn fritters rather than petrol. That is a pleasant consequence. But the rush to create facilities to produce eco-friendly alternatives made from crops, plants and animal fats has had consequences that are clearly worrying or at best unclear. The noble Lord, Lord Palmer, mentioned how much prices have goneup. Wheat prices in the UK have increased by approximately one third from below £80 per tonne to above £100 in the course of the past eight months. In the United States, the maize corn price is at its highest for 10 years. In August, the price of a bushel of maize corn was $1.87. At the end of last week, the Chicago futures market quoted a price of $3.74—doubling in six months.
	This has led to a lot of alarmist talk in the newspapers about the consequences. The Guardian and the Independent have been the leaders in that, but I was interested to see in last week's Sunday Times a feature by Kathryn Cooper, which states:
	"The race for biofuels is not without risks. Already there have been food riots in Mexico, where the soaring cost of corn has pushed the price of the country's staple tortilla beyond the reach of many of its poorest people. And the rainforests of Indonesia and Malaysia are being destroyed at a quicker pace as farmers clear the land to produce palm oil, another biofuel".
	The article goes on to quote an investor from a company called Invesco, saying that,
	"soaring food prices could be one of the factors that push UK interest rates to 5.75 % or even 6% because food is a big part of the Bank of England's inflation basket".
	Such was the effect of that comment, that some of your Lordships will doubtless have noted that when Tesco produced its record profit for the past year of about £2.5 billion, one or two critics said, "Goodness, in the year ahead it is going to be even more, because food prices are going to go up and that will enable Tesco to have a higher profit margin on food". I will not say horror of horrors, but I was interested that that was a reaction to the vast success of Tesco.
	This is the other side of the story. I have been thinking about this debate and these worrying comments, and I am reminded of the remarks of Lord Melbourne on the subject of Catholic emancipation. He said,
	"What all the wise men promised has not happened, and what all the damn fools said would happen has come to pass".
	There must be a great duty on us all to see that that is not the epitaph on the move into biofuels that we are talking about this afternoon. A real duty lies on the developed countries—the USA, Europe, Japan and ourselves—whose carbon emissions have created so much of the problem. We have a duty to see that the apocalyptic warnings that I have talked about are warnings only and not realised in practice.
	In that context, I am delighted to see that Defra has created the National Non-Food Crops Centre in York, which is encouraging farmers—to pick up the point made by the noble Lord, Lord Palmer—to use the 1 million hectares of arable land that it considers available in the UK to grow oilseed rape and wheat that is needed to meet our RTFO obligation of 5 per cent of road transport. As noble Lords this afternoon have said, experts at that centre are also investigating the second generation of biofuels and how it must come from a wider range of biomass, straw and forestry residues, for example, than the first generation.
	Finally, let us consider the position of the EU in this. The EU set a minimum of 10 per cent to come from biofuels by 2020—and then at the Council at the beginning of March proposed an overarching 20 per cent cut in greenhouse gas emissions by 2020. This led the Financial Times on 10 March to come out with a major article which started, almost in capitals, and with an exclamation mark:
	"The European Union has agreed to something! Its deal to cut greenhouse gas emissions by 20 per cent is far from perfect... but reaching any agreement on such a painful measure, in a union of 27 members, is an achievement. Europe has shown that it is serous about climate change".
	For those of us on the European Scrutiny Committee, this is at the heart of the matter. There will be huge haggling in the EU as to how that 10 or 20 per cent is divided between the countries, but surely here is a leading role for the European Union to play. No nation can solve the problem of climate change and cutting greenhouse gas emissions by themselves, nor can the EU—but it can give an example. It can persuade other European countries to move in the right direction by a mixture of firmness, co-operation and wisdom and give a vital lead.
	I very much hope that this is the challenge to which the EU Commission and Council will rise, as they are offering a carrot to the rest of the world by saying that in Europe we will cut emissions by 10 per cent more if others follow suit. It is in that context that the EU has to show muscle and the stick at times, too. EU action after 2020 will depend on others contributing as well.
	As worries about climate change increase, as they certainly will, the EU can in this context convince doubters of the Commission and Council of their usefulness and courage. This is not a challenge that can be avoided. The EU, in my judgment, as a coming together of 27 nations, is in the centre of the biofuels arena. That is where they have to stay—and the EU will be judged by what it achieves in this context.

Lord Grantchester: My Lords, this report is to be commended for its valuable contribution to the debate on renewable energy, carbon emissions and climate change through the increasing participation of biofuels. I congratulate the committee on its inquiry. I declare an interest as a dairy farmer in Cheshire and a director of the farmers co-operative Dairy Farmers of Britain.
	It is encouraging that Her Majesty's Government broadly agreed with and supported the conclusions and recommendations of the report. There is universal encouragement for sustainable renewable fuel supplies. However, we must be aware of target inflation, whereby political parties compete for the moral high ground, setting headline targets on a mound of soft aspirations. Targets must be tempered by critical and robust pathways with achievable milestones backed up by real, hard measures.
	Since the report's publication, the Government have taken forward many developments. They are to be commended on their commitment to develop reliable ways of ensuring that carbon and wider environmental aspects of biofuels are properly addressed withagreed international standards regarding calculation methodologies, reporting frameworks and sustainability. They are also to be commended for not having slowed down development on the pretext that these standards should be agreed first. However, it is vital that biofuels, especially imported ones, are fully traceable and can be demonstrated to deliver a net carbon saving to qualify for inclusion in the Renewable Transport Fuel Obligation. Biofuels serve no purpose if they do not contribute to reducing carbon emissions; for example, burning rainforest to grow palm oil for biodiesel makes no sense. Fuel produced by such activities should not obtain certificates for use in the UK.
	Having recognised the Government's achievement, I believe that they can be pressed to respond quicker and on a bigger scale; for example, they can be challenged to be bolder in the mixture of relative incentives—carrots and sticks. They must set out a clear strategy for the UK beyond 2010. They say that they are exploring the possibility that the level of the obligation could rise above 5 per cent after 2010. However, EU energy policy, through the biofuels directive of 10 January 2007, commits member states to levels of at least 10 per cent by 2020. Growing demand for biofuels will require significant expansion in production facilities. Clearly, investors need long-term security to reduce risk, spread costs and secure returns. The RTFO needs to be made for the same period as the renewable obligation for electricity to 2026. The Government must indicate quickly how they intend to implement this 10 per cent target to underpin investor confidence. Investment, especially in second-generation biofuels, cannot be assured.
	Tax incentives could be critically reappraised to draw forward more realistic supplies. A 30p duty incentive—a combined package of fuel duty saving and buyout price—has been proposed. How nearare the Government to confirming that figure? Discussions took place last summer with the Commission on the enhanced capital allowance scheme. This announcement in the budget was welcome, bringing uncertainty to an end.
	The motor industry needs to be pressed to respond quicker. There has to be a buy-in to a rising percentage use of biofuels backed by manufacturers' guarantees. It is to be noted that the motor industry was initially resistant to the introduction of lead-free petrol. The current 5 per cent limit for biofuel in conventional engines now lies well within safety tolerances and could be extended significantly. Reduced car tax incentives, reduced congestion charging and other innovative incentives could all play a part. Straight vegetable oil could be recognised as a biofuel and not classified as a fuel substitute. Her Majesty's Revenue and Customs guidance needs clarification to remove this confusion.
	With the changes to agriculture consequential on the reform of the CAP whereby farm payments are separated from production, land is currently available to meet the 5 per cent RTFO. It is incorrect to contend that the UK does not have the land availability to produce biofuels and food. In practical terms, after allowing for crop residues to be used for other purposes such as cattle feed, the net land requirement for biofuels is less than the area used to produce the current UK exportable surplus of wheat plus the area currently in set-aside. There are 560,000 hectares in set-aside. As part of the CAP, the scrapping of this anachronism with production subsidies needs to be addressed immediately.
	The East of England Development Agency predicts that, based on UK current conditions, two to five farming jobs could be sustained or created for each 1,000 tonnes of biofuel production. A 100,000 tonne processing plant could therefore mean 60 jobs, plus 500 jobs in agriculture. The ability to produce renewable energy and feed the nation can only improve agriculture's profitability and restore prosperity to the rural economy.
	The report also draws comparisons between the UK and the rest of the European Union. It shows that in many areas the UK is lagging behind other countries, notably Germany, France and Scandinavia. That has primarily been through more aggressive tax policies. The Government are now addressing that competitive element, and I am confident that further strategic developments such as a mandatory reporting scheme and increasing transparency in the market, will help to put the UK at the forefront of the debate. I applaud the steps being taken, but renewable energy will remain a challenge for a long time ahead.

Lord Plumb: My Lords, it is a great privilege to have served on EU Sub-Committee D over the past two years under the chairmanship of my noble friend Lord Renton of Mount Harry. I almost flinched when he said earlier that he had to remind some members of his committee on occasion that we were an EU committee and not just dealing with UK affairs. If I am a guilty party in that respect, I admit that it is perhaps because, having spent nearly 30 years in the European Union dealing with European affairs, I came home and found us so much a lame duck that I fought for the UK on those occasions and therefore referred perhaps more to UK affairs.
	The baton has been handed over to the noble Lord, Lord Sewel. It is a pleasure to continue to serve on the committee under his chairmanship. The report refers specifically to the European Union strategy on biofuels, which forms the basis of the plan of action for dealing long term with renewable energy in the interests of reducing greenhouse gas emissions as we face climate change. The noble Lord, Lord Sewel, set it out so clearly that I need add nothing to what he said, but I have no hesitation in supporting fully the whole report, looking at it as we did in the longer term.
	Since the report was written—a long time ago, as we were reminded by the noble Lord, Lord Palmer, in particular—much has happened. Targets have been set across Europe, and the European Union has declared that it has significant capacity for energy production from biomass. The European Environment Agency states that, by 2030, bioenergy could provide 15 per cent to 16 per cent—equal to 295 million tonnes of oil equivalent—of the requirements as opposed to only 4 per cent in 2003, without harming the environment. That is, of course, for all bioenergy, of which a substantial part could be feedstock for biofuels. We need, as others have stated, a clear strategy to give investor confidence to meet the mandatory 10 per cent biofuel target by 2020 and the 5.75 per cent target by 2010.
	Biofuels, in terms of production from crops such as wheat, rape and sugar and all arable crops are, as we recognise, a new technology requiring a good deal of research, enabling further efficiency along the whole production chain. Changes are taking place far more rapidly than perhaps many of us realise. Plant breeding has to be targeted at improving extractable oil and starch yield. The agronomy has to be considered, and that is changing.
	There are reduced inputs in various forms. In looking at processing efficiency, it is good news to hear that British Sugar is making considerable investment in a plant that will deal with a product about which we heard from my noble friendLord MacGregor. Development is taking place. Itrequires new skills in marketing techniques and the exploitation of the synergy with bio-energy and food uses. Technology also has to apply to the production of biofuels from wood equivalent, which allows a much greater range of biomass to be used. Again, that requires essential long-term research, but it has an exciting future.
	We have heard much of the great Brazilian experience on biofuels, which I have witnessed in that country over the past 30 years. It has shown an average efficiency gain of 4 per cent a year over the production chain. At what expense? We hear of the elimination of many forests, but nevertheless they have done it.
	From the evidence and research we studied forthe report, our conclusion is that, given sufficient support, there is no reason why the European Union and the United Kingdom cannot ultimately compete. It must be remembered that crops used in the production of biofuels are dual purpose. In wheat, one third of the crop for bio-ethanol is retained as distillers' grains, a high quality animal feed. In oilseed rape biodiesel production, 50 per cent of the product is retained as high-protein animal feed. That can replace protein feed imports, not only to benefit the economy but to reduce carbon emissions.
	An alternative is to generate further bioenergyfor the United Kingdom. Biofuel co-products canbe used to supply biomass for heat and power production, helping to reduce still further carbon emissions. The potential is there. The Minister said earlier that we do not want a lot of whingeing. There is no whingeing on this front; there are tremendous opportunities, and that is seen by those involved in longer-term production.
	As stated, the projected area of land required to meet the targets is in the region of 900,000 hectares in the UK alone. We have an average exportable wheat surplus of over 3 million tonnes, as the noble Lord, Lord MacGregor, said and mandatory set-aside of some 570,000 hectares of land. Those calculations take no account of the production of biodiesel from waste cooking oil or tallow, such as the 50 million litres used by Argent Energy in Motherwell, to which the noble Lord, Lord Palmer, referred.
	A market is emerging in renewable energy that provides prudent carbon savings over fossil fuels, which can be supplied by sustainable agriculture. The estimates of that august body, the National Farmers' Union, show that, in practical terms, if we remove the now outdated system of land set-aside and bring that land back into production, we can reach the target and make a real contribution on biofuels from fieldto fuel.
	For years the European Union has been castigated for overproducing food, resulting in the control measures to which we have all been accustomed over those years, stifling potential. Now a new market is emerging in renewable energy that proves carbons savings over fossil fuel. It must not be seen as a threat to the ever-cheaper supply of raw materials that people have become used to under the common agricultural policy.
	I hope that, in his response, the Minister can state positively his views on how we can move forward. I hope that he will take note of paragraph 46 of our report, which refers to the importance of joined-up thinking. We state that government partnerships, particularly in France, Germany and Sweden, are showing mutual co-operation. That is essential for success, and I hope that we can join those countries.

Viscount Ullswater: My Lords, the noble Lord, Lord Sewel, introduced this debate with his usual flair and wit, and I thank him for introducing the report today. Like many other noble Lords, I regret that there has been a gap of five months between the publication of this topical report and this debate. I declare an interest as a non-executive director of a farming company in Cumbria.
	"Say goodbye to your petrol station".
	So runs the advertorial from Biomotors Ltd in the November/December issue of The Monitor, Blue Skies. It states:
	"A simple upgrade will let most diesel engines run on locally grown rapeseed oil, cold pressed on the farm. It requires no chemical processing, generates no waste, and the co-products of seed cake and straw have multiple uses such as biomass heating".
	However, writing in the Sun last autumn, Professor James Lovelock took the oil companies to task when he said:
	"The one renewable energy [vehicles] will use is biofuel, which is made from crops. This fuel is heavily subsidised by you and me in taxes and will be a nice little earner for the oil companies while it lasts. Far from being green, biofuel is the most environmentally destructive of all energy sources. Huge areas of land would be needed to grow the biofuel and it can only be taken at the expense of land for food crops and land for natural forests that keep the air clean and breathable".
	I congratulate Sub-Committee D on plunging into this debate and bringing some reason and balance to the extreme views that I have just quoted.
	The report, The EU Strategy on Biofuels: From Field to Fuel, treads a careful line between the promotion of biofuels per se and the encouragement of the biofuels industry. It identifies three justifications for biofuels; like my noble friends Lord Selborne and Lord MacGregor of Pulham Market, I should like to look at those. The first is the security of energy supply; the second is the Government's agenda for CO2 saving; and the third is the commitment to agricultural development through growing biofuels in this country.
	The UK is taking tentative steps towards committing itself to the target set for 2010 under Article 3 of the EU biofuels directive, although the 3.5 per cent by energy offered by the UK falls somewhat short of the 5.75 per cent adopted by the majority of the other member states. Only Italy has opted for an even lower published target of 2.5 per cent. Without such a target and, as mentioned by the noble Lord, Lord Cameron of Dillington, without the tax incentives that go with it, in my view the industry would not get the kick-start it requires to become a sustainable industry in its own right. A few years ago the tax incentive to encourage motorists to switch from leaded to unleaded petrol had the desired effect. That demonstrates that, with the right fiscal incentive, the buying power of consumers can encourage effective investment by the oil companies and possibly British Sugar. The report is right to state that the EU needs to,
	"develop an appropriate policy framework and Member States to provide appropriate incentives to encourage further investment in production facilities".
	Will the Minister say whether the excise duty on biodiesel and bioethanol, which was lowered by 20p a litre, effective from January 2005 on this three-year rolling programme, will be continued after 2009-10? What criteria would be used to vary it? If the UK falls short of our target for 2010, surely it would notbe sensible to withdraw the incentive to increase production.
	The UK Government have pinpointed climate change as the number-one reason for promoting biofuel's use. It is important to understand that the energy consumed in production and transformation into biofuels may be at least nearly equal to, or even more than, the energy they deliver. That warning was given to us by the noble Lord, Lord Cameron of Dillington, and my noble friend Lord Selborne.
	That issue has split the environmental lobby, where some leading figures have denounced biofuels as a global disaster. In the USA the Worldwatch Institute estimates that to fill a tank of a typical SUV would use enough grain to feed one person for an entire year. The Government's 2006 energy review proposes a renewable transport fuel obligation to be introduced in 2008-09. It will require suppliers of fuel to ensure that a proportion of their sales are from renewable sources, with the obligation rising to 5 per cent by 2010. The energy review estimates that this will save one million tonnes of carbon in 2010. But the report is cautious about that. The committee considered some form of carbon certification to be desirable and would wish the European Commission to establish a European-wide system of certification for both imported and domestically produced biofuels and feedstocks, a point highlighted by the noble Lord, Lord Sewel.
	When considering agricultural development and growing crops dedicated to the production of biofuel, one's eyes turn immediately to the USA, where President Bush has given his support to the increase in land use for biofuels. At present I understand that it used 15 per cent of its corn crop for this purpose, and my noble friend has indicated that that will be increased by another 15 per cent. It is the second most important, cost-effective crop for producing biofuels after sugar cane, and 2 per cent of non-diesel transport fuel is biofuel. A report from the Worldwatch Institute, after warning of significant agricultural and ecological risks, finds that the technology has the potential to increase energy security, create jobs, save foreign exchange, reduce local pollution and emissions of greenhouse gases, and create new economic opportunities in rural areas.
	I agree with my noble friends Lord MacGregor and Lord Plumb about the land available in this country and in the northern hemisphere. We only have to look at the set-aside policy to understand that that was put in place to reduce the amount of land taken out for food production.
	My noble friend Lord Renton of Mount Harry indicated that corn prices have already risen on the Chicago exchanges. We need a careful balance between the increase in corn and wheat prices and the price of food. Nobody would deny that farmers are due an increase in their raw material prices, after decades of stagnation. I am sure that that would be echoed by my noble friend Lord Plumb. It is not for me to judge whether sugar beet or wheat should provide the feedstock of this country, but any increase in production facilities will divert crops away from food and into biofuel production.
	The report correctly urges a strong national commitment to agricultural economic development through biofuels. Like other noble Lords, I consider that the future will most likely lie in the second-generation production of biofuels, using cellulose and all the waste mentioned in this debate. Cellulosic ethanol has a potential to replace nearly 23 per cent of the EU25 petrol market, according to a consortium including the European Commission's Joint Research Centre. First-generation biofuels could only provide 4.2 per cent. The Nobel laureate Steven Chu, director of the Lawrence Berkeley National Laboratory in California, said that the potential yield from converting cellulose to biofuel could be five or 10 times greater than that for corn.
	The committee's report makes excellent reading. Although it limits itself to dealing with the EU biofuels directive, the evidence taken demonstrates that we have some way to go before it is clear whether biofuels are the future for the transport sector. We cannot escape the fact that global warming is with us, and we should take reasonable and sensible stepsto limit carbon emissions without losing sight of sustainable development.

Lord Teverson: My Lords, I am a proud member of the EU Sub-Committee on justice and home affairs. I disagree with the noble Viscount, Lord Ullswater, in one area. I, too, am usually critical of how long these reports take to come to this House. On this occasion, however, the report has hit the spot on topicality. The first time I read it, perhaps after a difficult debate in the House, I found it quite difficult to digest. The second time, I found it particularly comprehensive and good at going through the subject.
	I live in Cornwall and have a diesel car. Tryingto do something practical, two weeks ago I was wondering how I could buy biodiesel to be part of this revolution. I found two outlets in the far south-west, for both of which I would have had to drive some 50 miles on a round trip to fill up the tank. By that time, I would have wasted a 5 per cent obligation just on the trip. That puts some of the debate into context. The Commission's Renewable Energy Road Map, published in January, admitted that this area has been somewhat of a failure of European policy in the past, as many noble Lords have said. Despite the 2 per cent target of 2005, not even 1 per cent was reached. Three member states reached 1 per cent, and one—Germany, of course—accounted for two-thirds of the total production of biofuels. It has therefore been a failure to date. As my noble friend Lord Bradshaw said, the subject is in the much broader context of energy security and climate change.
	The report and today's debate are particularly timely, following the troika of announcements by the European Commission last month, which included biofuels. There were only three pronouncements on the great move forward on the European climate change strategy: the 20 per cent reduction in carbon emissions; the somewhat amazing 20 per cent renewable energy proportion of consumption as a whole, not just electricity; and the target of 10 per cent biofuels use by 2020. We are discussing an important agenda.
	Since the report was produced, as many noble Lords—particularly the noble Lord, Lord Renton of Mount Harry—have said, biofuels have moved from being an ecological saviour almost to the devil incarnate. That change has been relatively sudden, and we must either resist or adopt a much more balanced approach towards it. A number of issues currently make this such a contentious subject. On sustainability and the energy equation, the figures for corn as an energy crop raise the issue that 20 per cent more energy is required to produce biofuel than it generates. There is the problem of the knock-on effect of deforestation, the headline issue of whether we are feeding cars rather than people and all the emotion surrounding sustainability issues.
	There are also the knock-on effects, which many noble Lords have mentioned, of food prices, the possible reintroduction of monoculture in some economies, land use and so forth. There has been particularly bad press recently on biofuels in the United States and the Bush strategy on energy security, which has involved high subsidies for crops, increases in feed for animals and in exported food, and a very protectionist regime, although perhaps the recent agreement with Brazil has moved that on slightly.
	The noble Earl, Lord Selborne, mentioned the common agricultural policy and the resistance that we naturally have in the UK to reinvent, or to take a backwards step towards, the CAP. We already have a €45 subsidy per hectare on energy crops. Do we really want to move back, given the time and energy spent and the discomfiture caused to the agricultural community and farmers, to invent another version of the CAP to which we have recently said goodbye?
	The other area that is well mentioned in the report and has not been mentioned in the debate directlyis the increasingly sweating brow of European Treasuries as they start to lose tax revenue on one of their strongest lines: petrol and diesel. As biofuel consumption increases, Treasury income in rebates will go down. That is only sustainable to a certain degree. That is also true of capital allowances on major capital investments, although that is important in getting this industry established.
	I, too, welcome the comments of the noble Lord, Lord MacGregor of Pulham Market, about British sugar. There is also the investment taking place in Grangemouth and other areas.
	Then there is the whole area of scale. I find this difficult to understand. I recently read an article in the New Scientist on miscanthus, the total energy of the UK and the fact that it would take 14 million hectares to replace that in bioenergy for the whole energy consumption of the UK. That is an area slightly larger than the land area of England. There are many questions about that and I am not sure that the part answer of set-asides, as raised by the noble Lord, Lord Plumb, is quite as easy as we say it is. In many areas, farmers have rightly and constructively used that set-aside for biodiversity and farm conservation areas, and if we suddenly plough all that up and replace it with biofuel crops—I am not saying that that is necessarily completely wrong—the effect would be far more localised than the effect of what happens in rainforests in Brazil or Indonesia. We should expect local reaction and we need to plan for the potential effects on land use and biodiversity in rural areas.
	The noble Lord, Lord Cameron of Dillington, mentioned Denmark. I was interested to hear that Denmark may have started to change its mind. When I was in the European Parliament, the Netherlands and Denmark were looked upon as the most forward-thinking in their understanding of environmental and sustainability issues. The policy of Denmark that says that this is destruction is important.
	What are the conclusions? It is important to remember that oil production and oil reserves are going down worldwide. We are past the peak, andwe therefore need a substitute. The most obvious substitute is not biofuels; once we are at a certain level of oil pricing, the next easiest form of substitute is the liquefaction of coal resources, which is a far more environmentally damaging technology than biofuels will ever be. We need to start now in this area; we need to take it seriously, but we also need to proceed with caution.
	From these Benches, we say that the important area is the sustainable certification of biofuels. That is easy to say, but I find it difficult to understand how it can happen in practice, mainly because of the knock-on effects. We can look at the supply chain, whether through the supplier, as the report suggests, or by other mechanisms, and we can see that these crops are grown in proper places and have not encroached on rainforests, but do the crops that they have substituted or the extra land needed mean deforestation elsewhere? There are knock-on effects through this holistic economic system. It is difficult to be clear about certification, but we must attempt it.
	As all noble Lords have said, the second generation of biofuels—cellulose-based biofuels—is the most important. They are clearly the way forward and are perhaps more naturally suited to the European climate and ecology than first-generation biofuels. We should not be overprotective. At the moment, the European Union has 45 per cent tariffs on bioethanol, though not on many of the products that feed into biodiesel. The tariffs need to come down so that we do not have a protective market in the long term.
	I agree with the Government's decision, which has been widely applauded in the House, to implement the RTFO. I believe that most things should be done, if at all possible, through market mechanisms, but that is the right way to kick-start the process, ensure that we reach our targets and start this industry, which will become an important part of our economy.
	However, because this is a much broader issue, we need a proper price for carbon, whether through real emissions trading systems that work or carbon taxation, so that markets and people can make choices about how CO2 emissions targets are met. I have one question for the Minister: what are the Government's proposals for a credible certification process that goes alongside the EU proposals and the RTFO when it is introduced in 2008?

Baroness Byford: My Lords, this has been a wide-ranging and informative debate. I am grateful to the noble Lord, Lord Sewel, for introducing it in his fulsome way. I am also grateful to my noble friend Lord Renton of Mount Harry. I record my sincere thanks to Lord Carter and the noble Lord, Lord Palmer, and other noble Lords who took part in the debates when we took the Energy Bill through. Clearly, when we started on that Energy Bill, the Government had no intention whatever of letting the obligation come into being. It was sheer persistence that enabled it to happen, so I am grateful to all noble Lords who participated in that process.
	This report is an important and timely piece of work. It is timely because we are dealing directly with the effects of climate change and are also looking at the diversification of British agriculture. I should remind the House that my family has farming interests. We have a farm in Suffolk where we grow wheat, oilseed rape and, because of our location, this year, we are growing a small amount of sugar beet for the first time.
	In his introduction the noble Lord, Lord Sewel, covered four or five of the most important things. Other noble Lords have touched on them. I shall mention them so that people do not think I have not picked up on them. First, the directive has not been effective. Other noble Lords have reflected on that. My challenge to the Minister when he responds is: what will the Government do about it because clearly there is a problem?
	Secondly, carbon certification was raised by noble Lords. Thirdly, there was the fair access for imported fuels. In view of the implication that has for deforestation, I shall return to it later. Fourthly, there was the question of the use of second-generation fuels and their importance. We support the development of that. Fifthly, there is the question of carbon reduction and energy security. That is crucial in the way we view future strategy.
	The UK's current biofuel target stands at 3.5 per cent by 2010. That is well behind many other member states, which set theirs at 5.75 per cent. Why did the Government not set a relative value target of 5.75 per cent, which was set by the EU Commission? Did they feel that they would not achieve it and therefore set a lower target? Indeed, we are not likely to achieve that lower target either. So we are in a lose/lose situation.
	Noble Lords will not be surprised to hear me say that UK farmers welcome the opportunities which energy crop production brings. The NFU in its briefing states that UK farming has the ability to meet the 5 per cent demand for biofuel in petrol and in diesel markets. Bioethanol at 5 per cent equates to approximately 3 million tonnes of wheat—a matter to which other noble Lords have referred. That is the approximate annual figure of wheat export surpluses.
	The 5 per cent demand on biodiesel equates to2.7 million tonnes of oilseed rape. In 2005, 1.9 million tonnes of oilseed rape was produced in the United Kingdom. In that year the set-aside was 559,000 hectares, which equates to 1.78 million tonnes and also the 140,000 hectares of fallow land. In addition to the biodiesel, there is the potential for increased use of vegetable waste oil sources and tallow, to which my noble friend Lord Plumb and many others referred. These figures shows that it is possible for the UK to produce enough biofuels to meet the UK's targets set out to 2010 without having to rely on imports.
	I believe that it would be naive and wrong to suggest that imports will not play their part as they do now. It is crucial that if we are not careful we will simply meet our target by sucking in ethanol from Brazil and palm oil from Indonesia. And, as other noble Lords have said, we have already watchedthe deforestation in these countries, I believe with horror, and seen the devastating consequences for endangered species, biodiversity and vulnerable communities, while totally negating support for rainforest contained so recently in the Budget speech.
	As my honourable friend Jim Paice said recently,
	"We believe that the Government must do more to stimulate competitive, local production of biofuels and guarantee that any imports necessary to make up the shortfall do not threaten the further destruction of rainforest".
	Paragraph 82 of the report reflects the committee's concerns, in that,
	"steps will need to be taken to ensure that the overall environmental benefits of imported alternative fuels are properly realised".
	The following paragraph goes on to talk about the difficulty of accurately monitoring and evaluating imported biofuels, as other noble Lords have highlighted. It recommends needing a certificate,
	"of the lifecycle environmental performance of both imported and domestically biofuels".
	Indeed, the noble Lord, Lord Grantchester, my noble friends Lord MacGregor and Lord Selborne and particularly the noble Lord, Lord Cameron, raised that issue.
	In a recent Written Question, I asked what proportion of biofuels in the United Kingdom is sourced from British crops and what proportion from imported commodities. I was surprised that the noble Lord, Lord Rooker, stated that current biofuels sales in the United Kingdom are from both domestic and imported sources. Indeed, but it would be good to know the proportions. Perhaps the noble Lord, Lord Bassam of Brighton, can help us with that today.
	Noble Lords have talked about the costings and comparisons. The costings on page 25 compare 30p to 45p for a litre of bioethanol made from wheat and sugar beet in the European Union with 6p to 11p for bioethanol made from sugar cane from Brazil. Do these figures include the cost of transporting thefuel? Do they incorporate a realistic cost for the environmental damage incurred in growing the raw material? And do they reflect adequate compensation for any damage done by the production process? Again, that is not clear.
	Allegations abound that it is not possible for us to produce our 5 per cent target given the current availability of land, but I hope that the figures that I and other noble Lords have given today reflect that we can. We can certainly meet the 2010 target. Given the EU policy to increase the target from 5.75 per cent by 2010 to 10 per cent by 2020, the situation can change in the long term. In paragraph 97, the committee recognises the ability to bring in more EU land, including set-aside, to grow energy crops while respecting biodiversity policies, but it goes on to say:
	"However, the EU must always remain secure in its food supply".
	There could be difficult decisions to take in future years, and I am sure that the committee is right.
	That brings us to the issue that many noble Lords have raised: the whole question of second generation biofuels. If we accept the likelihood of increasing demands, as I do, the scope for second generation biofuels becomes increasingly important and could bring greater environmental advantages than are currently provided by biodiesel and bioethanol. The committee recognised the importance of advancesin engineering and in chemical and agriculturalcrop technologies. It stressed the importance of co-ordinating, financing and organising European research and development. Indeed, there is no sense in each country doing its own thing when we could do it together much better. My noble friends Lord Plumb and Lord Ullswater referred to this. They also referred to the use of by-products and potential feedstocks that are now classified as waste. Perhaps the Minister will tell us in his reply whether the Government have changed their mind about waste and future second generation biofuels. At the Oxford farming conference earlier this year, which I attended along with one or two other noble Lords, one of the most exciting contributions came from Professor Diana Bowles, who talked about the breakdown of plants and how we can use the cellulose in the future. The noble Earl, Lord Selborne, mentioned this in his speech. I also understand that Warwick University is undertaking work on creating hydrogen from water and biomass. This work is being funded by Advantage West Midlands. I wonder whether the Minister knows of this and other similar projects that are being undertaken at this stage.
	I turn now to where we are and where we might need to seek greater confidence. In its excellent briefing, the NFU made nine key points. I shall not go through them all, but will pick up on five of them. The NFU believes, as other noble Lords have explained, that the Government must set a clear strategy for the UK beyond 2010 to create investor confidence to meet the mandatory 10 per cent biofuel target by 2020. It also believes that the key support policy—obligation level and fiscal support—must be in place for longer than 2010 to give investment greater certainty in the market conditions. It is also unclear as yet—perhaps we shall get clarification—whether the buy-out penalty, at 15p per litre, is sufficiently high to ensure that fuel suppliers will not simply opt out of the obligation. The Government should commit to reassess the rate and alter it to ensure that "oil majors" address their supply of biofuels.
	Fourthly, the carbon saving and sustainability reporting system for biofuels must account for previous land use and, where possible, use existing assurance schemes to reduce unnecessary costs to the industry. The UK biofuel feedstock must use adapted versions of current high food assurance standards and environmental legislation. Imports must prove similar high standards for sustainable production—again, a point raised by other noble Lords.
	I turn to another crucial issue. R&D and knowledge transfer must be adequately funded to allow progress in the industry. Straight vegetable oil must be recognised as a biofuel, not classified as a fuel substitute. HMRC guidance must be clarified to remove the confusion with that biofuel.
	We have had an extremely good debate this afternoon and I am extremely grateful to all those who worked extremely hard to produce this report. I just add one comment. The Government may well have to provide the right financial incentives, and duties and taxes on fuel may have to be rebalanced at some stage. I wonder whether the Minister would comment on that.

Lord Bassam of Brighton: My Lords, I start by congratulating my noble friend Lord Sewel on his excellent report. As the noble Earl, Lord Selborne, said, it was very concise and well argued and, as usual, my noble friend delivered a speech thatwas witty and to the point. This has been an extraordinarily interesting debate. I confess that I am a novice on the issue, but I am a willing student who has, on the evidence of this afternoon, fallen among farmers. I am most grateful for their contribution because it has certainly added to my understanding of the subject.
	The topics covered have been wide indeed. We have had calls for a more beneficial tax approach to biofuels; the Government have been urged to give greater market certainty—the noble Lord, Lord MacGregor, made that point very powerfully and persuasively. The noble Lord, Lord Renton, said that we had a real duty to ensure that the apocalyptic warnings of some who enter the debate do not come to pass. I certainly agree about that. I now look forward to having the opportunity at some point to go to Indianapolis and taste the air. I think that corn fritters were on offer.
	The noble Viscount, Lord Ullswater, was right to congratulate Sub-Committee D for taking on some of the more extreme views expressed outside your Lordships' House with a very balanced report. The noble Lord, Lord Teverson, said that the report hit the spot. He was absolutely right. The noble Lord, Lord Palmer, was right to say that the report identifies our position has having lagged behind Europe in the past, but we are now playing catch-up. The noble Lord, Lord Cameron, referred to the importance of recognising the value of second-generation biofuels, our moves toward that and the investment required to achieve a positive outcome.
	I put on record and make it plain that the Government are fully committed to their promotion of sustainable biofuels. Ensuring the sustainability of biofuels is an essential part of our policy, a point to which I shall return, as I picked up on other observations made in the debate. Biofuels have an important and strategic role to play in helping to meet the UK and Kyoto climate change targets. As many noble Lords have said, they offer other social and economic benefits, not least to those in rural areas where there is significant potential for new employment opportunities from this emerging industry. Job creation is a valuable by-product of the development of biofuels. Biofuels offer significant potential for reducing greenhouse gas emissions in transport today where other renewable sources, such as wind, solar and tidal power, are simply not practical. But transport is not the only end-use for bioenergy. The forthcoming biomass strategy, which is due to be published alongside the energy White Paper, will explore how biofuels fit within a wider bioenergy-use context, including for heat and power generation.
	Let me say a few words about the strength of the biofuels market, which, as many noble Lords have said, is very much an emerging market in the United Kingdom and in Europe generally. As my noble friend Lord Grantchester noted, some member states, such as Germany, France and Sweden, have had domestic biofuels markets for a number of years, which are encouraged by measures introduced to support their Governments' agricultural and fuel-supply policies. But many EU member states are in a similar position to the United Kingdom in seeing biofuels only very recently coming to the fore.
	As the noble Lord, Lord MacGregor, said, our market is very young and we entirely agree with the committee's conclusion that additional measures are needed to ensure a mainstream market. We see the sustainability and environmental policy arguments as fundamental drivers for how we should seek to encourage the more rapid growth of a vibrant biofuels market. That is why, in late 2005, we announced our plans to introduce a renewable transport fuel obligation. Great credit was given to those, such as the noble Lord, Lord Palmer, and the late Lord Carter, for playing their part, along with our Ministers, in ensuring that that RTFO was put in place.
	That early announcement and the introduction of fuel duty incentives has already led to a step change increase in the UK biofuels market, with new plants coming on stream. We have heard in particular from the noble Lord, Lord MacGregor, about some of those developments today. In 2004, biofuels represented just 0.05 per cent of total fuel sales. But in 2006, 264 million litres were sold—about 0.5 per cent of total fuel sales—which is a tenfold increase. First quarter figures for this year show that this trend is set to continue.
	The noble Lord, Lord MacGregor, and my noble friend Lord Grantchester said that we should be more ambitious and more robust in our approach. But we should agree that the progress made since 2004 is enormously encouraging. We are confident that,once the renewable transport fuel obligation is implemented in April 2008, the trend will continue upwards so that, by 2010, 5 per cent of all fuel sold in UK forecourts will come from renewable sources. That is the highest inclusion rate possible under current EU fuel-quality standards. It will mean real environmental benefits, equivalent in carbon terms to taking a million cars off the road in 2010. We welcome the committee's support for the approach that we are taking through the RTFO. The Government were already looking beyond 2010 for biofuels before the recent decisions reached at the spring European Council. We have said that we will consider increasing the RTFO level in the future. We are inviting views on what this might look like aspart of the Department for Transport's current consultation.
	It might be worth me saying a few words about the impact of the spring Council. The endorsement ofthe energy policy for Europe was a significant step forward, which the UK welcomed strongly. The agreement of European targets for renewable energy of 20 per cent and for biofuels of 10 per cent by 2020 was historic and extremely ambitious. Each country will have to work out how it plans to meet its obligations, given its individual circumstances. I am sure that noble Lords will be interested to know that the 10 per cent biofuels target as described in the Council conclusions is closer to a 13 per cent target for UK purposes. That is because, whereas Europe refers to energy content for biofuels, in the UK we use volume sales as our benchmark as it fits better with our national fuel duty arrangements.
	I think we all agree that this is an ambitious target but I am pleased to say that, in setting the biofuels target, the European Commission took on board several key points made by the United Kingdom, particularly in relation to sustainability, a key issue for my noble friend Lord Sewel's committee. In our preparations for the RTFO, we have always stressed that there are several big ifs associated with setting higher targets now for the future. We have already set three key conditions that would have to be met before the RTFO level could be increased. These are the development of robust carbon and sustainability standards for biofuels. The noble Earl, Lord Selborne, and the noble Lords, Lord Cameron and Lord MacGregor, were vociferous in arguing for those. There has to be greater certainty that using higher blends of biofuels will not harm vehicles on the road today, and that costs to the consumer have to be acceptable. It is these conditions that have also been recognised as important by the Commission and captured as conditions that need to be met if the spring Council 10 per cent target is to be achieved.
	Perhaps this is the right moment to say a littlemore about the sustainability aspects. Ensuring the sustainability of biofuels and maximising the carbon benefits they offer are real challenges; we are all agreed on that. We do not yet have agreed sustainability standards for biofuels either internationally or at the European level. The UK is, however, widely regarded as taking a global lead in the area, and a number of noble Lords have acknowledged that and congratulated the Government on taking that lead. It is something I am proud of as well. The Government welcome the support given by the committee to our focus on sustainability issues. Through wide stakeholder engagement and research, we are developing methods for calculating life-cycle carbon savings. We have also developed a clear vision of what sustainability criteria we want to address, such as land use changes, the impact on biodiversity, water resources, soil quality and so on.
	However, we need to road test this work on the ground throughout the whole supply chain from the farmer in the field to the petrol station forecourt, and crucially we have argued that we need to build an international consensus, particularly among producer countries such as Brazil, in order to move forward internationally those sustainability standards. Acting without international agreements would bring its own difficulties, and the World Trade Organisation rules are a major consideration.
	We continue to work together with the United Kingdom's Low Carbon Vehicle Partnership, other member states and international standard-setting bodies to try to hammer out a common set of principles and objectives. In parallel we are developing a reporting mechanism as part of the RTFO implementation strategy. The mandatory reporting scheme called for by a number of noble Lords will ensure transparency on the effect of the policy, and will help to focus obligated companies' attention on the sustainability and carbon balance of the fuels that they source. This is because the public will be able to find out easily how a particular transport fuel supplier is performing based on the information we will be asking each company to make available.
	Alongside our RTFO implementation work programme, we are encouraging the European Commission to make use of our own developing knowledge in this area, and we are also pressing the Commission to develop a robust and transparent sustainability assurance regime as a vital and early part of its plans to meet the ambitious new European biofuels targets. I come back to the spring Council and its new targets. The Commission has added one further condition for the biofuels target. It has specifically identified the need for second-generation biofuels to be a commercial reality if the ambitious new targets are to be met. We agree that this is sensible. So-called second-generation technologies will be able to use a far wider range of feedstocks than conventional biofuels, a point made clear by a number of noble Lords. Potentially—and very valuably, I argue—that will include things like green municipal waste, to which the noble Baroness, Lady Byford, in particular drew our attention. That would not only bring higher greenhouse gas savings buthelp to address our waste problem, reduce pressureon land and avoid competition with food. The Government agree with the committee's conclusion that the European Commission has an important role to play in enabling these more advanced biofuels, including through research and development.
	Although second-generation biofuels are not yet a commercial reality, there is, as was widely appreciated during this afternoon's debate, considerable excitement about their development and a great deal of research. There is now a lot of demonstration activity under way in this area. However, it is still unclear how rapidly those second-generation biofuels might become core to the biofuels market. These are exciting times, as we prepare to implement the RTFO next year and rise to the considerable challenge of the European Union spring Council's agreement and the targets that have been set. The Government welcome the way that the committee has raised the topic among noble Lords and more generally and stimulated a much wider debate.
	I was asked a large number of questions. I am more than happy to provide some of those answers now, but if I miss something I promise I will provide a written round robin letter to all who have contributed this afternoon. I shall start with the question my noble friend Lord Sewel drew to our attention, about the figures on relative efficiency and the cost-effectiveness of biofuels compared with other measures. Here I will have to commit to write to the House with the details, but the Government's detailed economic analysis was provided in our revised climate change programme, which we published last year.
	The noble Lord, Lord Bradshaw, asked a number of valuable questions. He asked whether the incentives to the oil companies were strong enough to ensure that they will supply the fuel. We have set the level of penalty under the renewable transport fuel obligation at a level high enough to ensure the supply of biofuels. We will keep that level under review to ensure that the policy achieves its objectives. The noble Lord, along with the noble Lord, Lord Grantchester, asked the important question: how will we achieve the 10 per cent target? From next year it is our intention to introduce a renewable transport fuel obligation that will require fuel suppliers to ensure that a percentage of their fuels are renewable. We believe that mechanism will enable us to meet future targets. However, higher targets than 5 per cent are subject to important caveats, and we need to understand those. In particular, the biofuels need to be sustainable.
	We are inviting views on the longer term for the RTFO in the current consultation, and we will feed the responses we receive into our development of a strategy for responding to the EU targets themselves. It is worth bearing in mind that those EU 2020 targets have some very important provisos, and we will want to consider them with our European colleagues.
	The noble Lord, Lord Bradshaw, also asked whether the 10 per cent target included aviation. The EU target for biofuels by energy content for 2020 relates to diesel and petrol consumption. Biofuels and aviation are an area of interest, although there are major challenges in our view to finding a fuel that operates efficiently in aircraft. For aviation, we argue that the emphasis and challenge is currently to promote co-operation to stimulate alternative aircraft fuels to kerosene, and the OMEGA project is looking in particular to stimulate that development.
	The noble Lord, Lord Cameron, was right to draw our attention to the importance of research and development in second-generation fuels and to raise the issue, as he put it, of Defra cuts. The Government recognise the importance of developing new and sustainable sources of biofuels, particularly the importance of second-generation technologies. But that research is not merely supported by Defra programmes; industry is a key R&D source, for example, and the DTI is also a major supporter for government R&D in this area. It is a cross-government activity, reflecting the cross-cutting nature of biofuels in terms of policy development. The renewable transport fuel obligation itself should encourage industry to invest in these advanced technologies.
	It is worth acknowledging that we are investing something like £1 billion over the next 10 years through the Energy Technologies Institute. An important part of its programme is yet to be developed but it will consider transport and energy issues and look at biofuels in particular.
	The noble Lord, Lord MacGregor, argued for stronger signals and incentives to stimulate the market and said that tax incentives would play an important part of that. It is worth noting in that context that the Chancellor has committed to maintaining the 20p per litre duty differential until 2009-10. In addition, the buyout price under the RTFO is 15p per litre, providing a total level of support of up to 35p a litre. That should ensure that we meet the targets under the RTFO commitment.
	The noble Lord, Lord Palmer, made an important point about us lagging behind member states, whichI dealt with in my broader commentary. He alsomade the case for having a dedicated government department for biofuels and bio-energy, and argued that the current situation was too fragmented. That is an interesting idea, but I am not persuaded of the benefits of that at this stage. The Government will shortly publish our energy White Paper and our biomass strategy. They will reassure my noble friend that all government departments with an interest in biofuels are working effectively together to develop a coherent and joined-up strategy. To that end, the noble Lord, Lord Plumb, made a plea for partnership approaches. Of course we agree with that. That is why we have made the progress that we have.
	I will draw the debate to a close now. Some questions are still unanswered and I know that the noble Baroness, Lady Byford, will no doubt chide me for not getting through all of the points that she asked. I apologise for that, but this is a wide-ranging and complex subject. It is no doubt a subject towhich your Lordships' House will want to return on numerous occasions. I commit this afternoon to providing noble Lords who have participated but not had all their points answered with as full a response as I can. I congratulate the noble Lord, Lord Sewel, again. I greatly enjoyed the debate and embarked at least on the lowest steps of a sharp learning curve on the subject—an extremely important subject for our security in food supply, our environmental benefit and for the long term.

Lord Sewel: My Lords, I think that our cut-off time is seven o'clock, which is quite nice. That enables me to have sufficient time to thank everyone who has participated in the debate. I particularly thank those who are not actually members of Sub-Committee D. It is always quite rewarding to see a subject such as this at least stirring interest among noble Lords who are not particularly members of the anorak brigade of the sub-committee. It has been a debate where there has been a lot of common understanding and common perspective, and I would not have predicted that a few months ago.
	I particularly thank my predecessor the noble Lord, Lord Renton of Mount Harry, who chaired the sub-committee during the period of the inquiry. What was his contribution? In a way, the sub-committee has been rumbled: it was rumbled first by the noble Earl, Lord Selborne, and then by the noble Lord, Lord MacGregor of Pulham Market. There were a number of different voices on the committee. The noble Lord, Lord Renton, brought those voices together and we finished up with a unanimous report. That was quite an achievement.
	When we look at biofuels, the important thing to realise is that it is not a quick fix. The case is not open and shut by any means; it is more complex than many of us thought at the outset and the more we look at it, the more complex it becomes. I am glad that the Government, in their response and in what my noble friend said this evening, are seized of the importance that we attach to ensuring that real environmental gains are secured in the development of biofuels. Quite honestly, the whole argument disappears if that is not achieved. Then there is the importance that we attach to moving as quickly as possible to developing technologies for second-generation biofuels. Again, there is widespread acceptance that it is through the second generation that the real jump forward will take place. We have to go through the first step, puttingthe investment into first generation biofuels, but the big breakthrough will take place with the second generation.
	Finally, I thank all those who put in so much work to make the report possible, including our witnesses and our staff, who have produced a very well written and coherent report.